Bitcoin held above $77,000 on Friday, consolidating after hitting its strongest level since early February earlier this week.
The largest cryptocurrency is up about 13.6% in April, putting it on track for its best monthly performance in a year, according to CoinGlass data. The rebound follows a rough stretch, with crypto markets logging their longest losing streak since 2018, posting consecutive monthly declines from October to February.
The turnaround comes as the broader macro backdrop has improved. US stocks have staged a strong recovery, with the S&P 500 and Nasdaq rising back to record highs after briefly slipping into correction territory earlier this year.
But there is also a crypto-specific driver behind the move.
Delivery of Tether’s USDT the largest and most popular stablecoin, has risen to just under $150 billion, adding about $5 billion over the past two weeks after months of stagnation.
This matters because stablecoins – cryptocurrencies tied to fiat money like the US dollar – act as liquidity in crypto markets that capital traders use to buy digital assets in the blockchain economy. Analysts often interpret stablecoin growth as a sign of capital flowing into the crypto market, a healthy signal for asset prices.
Markets ‘stopped worrying’ about the war in Iran
Still, the macro picture is not cleared yet. Geopolitical tensions in the Middle East and uncertainty surrounding the Iran war continue, keeping oil prices at high levels.
But for now, markets seem to be looking past that, said Jasper de Maere, OTC trader at Wintermute.
“The stock and crypto markets seem to have stopped worrying about convoluted 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 robust stock markets are helping offset concerns about higher energy costs and geopolitical risks.
FOMC test coming
In that environment, bitcoin is hovering near the top of its trading range, while the $79,000 level proved to be a mighty ceiling with traders taking profits.
That level “matters structurally because heavy institutional overhead supplies are 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 move and who is buying. Moves primarily driven by short covering tend to fade as momentum cools, while a breakout supported by sustained institutional demand could mark a more lasting shift, he said.
The next test will come soon with the Fed meeting in April that could determine whether the current rally lasts, Haeems said.
If ETF inflows continue through that event, he said, $79,000 could turn from resistance to support, opening the door to a higher trading range. If flows fade, bitcoin could slip back to the $75,000-$77,000 range.
