Bitcoin has held steady above $77,000, following a significant surge earlier in the week to its highest level since February. This upward trend puts the cryptocurrency on track for a 13.6% gain in April, its best monthly performance in a year, according to data from CoinGlass. The rebound comes after a prolonged downturn, with crypto markets experiencing their longest losing streak since 2018, from October to February. The improvement in the broader macroeconomic landscape, including a strong recovery in US equities with the S&P 500 and Nasdaq reaching record highs, has contributed to this turnaround.
A key driver specific to the crypto market is the significant growth in the supply of Tether's USDT, the largest stablecoin, which has increased by approximately $5 billion over the past two weeks to nearly $150 billion. This surge in stablecoin supply is seen as a positive indicator for crypto asset prices, as stablecoins provide liquidity in the market.
Analysts view the growth of stablecoins as a signal of capital flowing into the crypto market. Despite the persistence of geopolitical tensions and uncertainty surrounding the Iran conflict, which has kept oil prices elevated, markets appear to be looking beyond these risks for now. According to Jasper de Maere, an OTC trader at Wintermute, strong corporate earnings and the resilience of equity markets are offsetting concerns about higher energy costs and geopolitical risks, leading to a level of fatigue and complacency in the market. De Maere noted that the equities and crypto markets seem to have become less concerned about the intricate details of the conflict.
The next significant test for bitcoin will be the April Fed meeting, which could determine whether the current rally is sustained. The ability of bitcoin to break through the $79,000 level will depend on the drivers of the move and the participants involved. A breakout driven by sustained institutional demand could mark a more durable shift, whereas a move driven primarily by short covering may fade once momentum cools.