Bitcoin has maintained its position above $77,000, following a notable surge to its highest level since early February, with the cryptocurrency poised for its strongest monthly performance in a year, having gained around 13.6% in April. This rebound comes after a prolonged period of decline, with crypto markets experiencing their longest losing streak since 2018.
The recent upturn can be attributed to an improved macroeconomic environment, with US equities recovering and reaching record highs. Additionally, the growth of Tether's USDT stablecoin, which has increased by approximately $5 billion over the past two weeks to nearly $150 billion, has acted as a catalyst for the crypto market, as stablecoins provide liquidity for traders to purchase digital assets. The expansion of stablecoins is often seen as an indicator of capital flowing into the crypto market, which can have a positive impact on asset prices. However, despite the current optimism, geopolitical risks and uncertainties surrounding the Iran conflict persist, keeping oil prices high.
Nevertheless, markets appear to be looking beyond these concerns, with strong corporate earnings and resilient equity markets offsetting worries about higher energy costs and geopolitical risks. The upcoming Fed meeting in April will be a crucial test for the current rally, and the outcome will depend on the drivers behind the move and the level of institutional demand.