Bitcoin has maintained its position above $77,000, following a notable surge to its highest level since early February, with the cryptocurrency poised for a 13.6% monthly gain, its best in a year, according to CoinGlass data. This rebound follows a prolonged downturn, 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 significant growth in Tether's USDT, the largest stablecoin, to nearly $150 billion, with an increase of approximately $5 billion over the past two weeks, is a crypto-specific factor driving this move. Stablecoins, being tied to fiat currencies like the U.S.
dollar, serve as liquidity in crypto markets, signaling capital flow into the crypto market and a positive indicator for asset prices. However, geopolitical tensions and uncertainty surrounding the Iran conflict persist, keeping oil prices elevated. Jasper de Maere, an OTC trader at Wintermute, observed that equities and crypto markets seem to have become indifferent to intricate headlines on the conflict, possibly due to fatigue or complacency, as strong corporate earnings and resilient equity markets offset concerns about higher energy costs and geopolitical risks.
The upcoming FOMC meeting will be a crucial test for the current rally's sustainability, with the ability to break through the $79,000 level depending 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 mainly by short covering may fade once momentum cools.