Bitcoin has maintained its position above $77,000, following a notable surge to its highest level since early February. This upward trend puts the cryptocurrency on pace for its most significant monthly gain in a year, according to data from CoinGlass, with a 13.6% increase in April. The rebound comes after a challenging period, marked by the longest losing streak in crypto markets since 2018, with consecutive monthly declines from October to February.
The improvement in the broader macroeconomic landscape, including a strong recovery in U.S. equities with the S&P 500 and Nasdaq reaching record highs, has contributed to this turnaround. Additionally, the supply of Tether's USDT, the largest stablecoin, has grown to nearly $150 billion, with an increase of approximately $5 billion over the past two weeks, following months of stagnation.
This growth in stablecoins, which act as liquidity in crypto markets, is often seen as an indicator of capital flowing into the crypto market, signaling a positive trend for asset prices. However, geopolitical uncertainties, particularly regarding the Iran war, continue to affect oil prices. Jasper de Maere, an OTC trader at Wintermute, observes that markets seem to be overlooking these geopolitical concerns for now, attributing this to a level of fatigue and complacency. He notes that strong corporate earnings and resilient equity markets are offsetting concerns about higher energy costs and geopolitical risks.
The upcoming Fed meeting in April will be a crucial test for the current rally. According to Adam Haeems, head of asset management at Tesseract Group, whether bitcoin can break through the $79,000 level, which has proven to be a significant cap, depends on the drivers of the move and the participants involved. A breakout supported by sustained institutional demand could mark a more durable shift, while a move driven primarily by short covering may fade once momentum cools.