bitcoin it held above $77,000 on Friday, consolidating after hitting its strongest level since early February earlier in the week.
The largest cryptocurrency rose about 13.6% in April, putting it on track for its best monthly performance in a year, according to data from CoinGlass. The rally follows a rough patch, which saw crypto markets record their longest losing streak since 2018, recording consecutive monthly declines from October to February.
The change comes as the broader macroeconomic context has improved. US stocks have seen a strong recovery, with the S&P 500 and Nasdaq reaching record highs again after briefly falling into correction territory earlier this year.
But there is also a cryptocurrency-specific driver behind this move.
Tether’s USDT offering the largest and most popular stablecoin, has risen to just under $150 billion, adding around $5 billion in the past two weeks after months of stagnation.
That’s important because stablecoins (cryptocurrencies pegged to fiat money like the US dollar) act as liquidity in cryptocurrency markets, the capital that traders use to buy digital assets in the blockchain economy. Analysts often interpret the growth of stablecoins as a signal for capital to flow into the cryptocurrency market, a healthy sign for asset prices.
Markets “stopped worrying” about the war with Iran
Still, the macro picture has not yet become clear. Geopolitical tensions in the Middle East and uncertainty surrounding the war in Iran persist, keeping oil prices at high levels.
But for now, markets appear to be looking further afield, said Jasper de Maere, OTC trader at Wintermute.
“Stock and cryptocurrency markets seem to have stopped worrying about intricate headlines about the direction of the conflict,” de Maere. “This shows a certain level of fatigue and potentially complacency.”
He noted that strong corporate earnings and resilient stock markets are helping to offset concerns about higher energy costs and geopolitical risks.
FOMC test is coming
In that environment, bitcoin sits near the top of its trading range, while the $79,000 level proved to be a powerful limit for profit-making traders.
That level “matters structurally because strong institutional supply sits just above it,” said Adam Haeems, head of asset management at Tesseract Group.
Whether BTC can break through will depend on what is driving the movement and who is making the purchase. Moves driven primarily by short covering tend to fade once momentum cools, while a breakout backed by sustained institutional demand can mark a more lasting turnaround, he said.
The next test will come soon with the Federal Reserve’s April meeting that could determine whether the current rally holds, Haeems said.
If ETF inflows continue during that event, he said, $79,000 could move from resistance to support, opening the door to a higher trading range. If flows fade, bitcoin may fall back into the $75,000 to $77,000 range.
