Investing.com — Bitcoin price rose to a three-week high on Friday and was on track for a strong week as risk appetite was boosted by a massive interest rate cut by the Federal Reserve.
While the world’s largest cryptocurrency had initially seen a mixed reaction to the rate cut, it eventually followed a bullish trend in other risk-driven markets, specifically stocks. Cryptocurrency prices in general rose on Friday and were also on track for weekly gains.
rose 2.9% to $63,813.9 at 01:24 ET (05:24 GMT), its highest level since mid-August.
Bitcoin heads for a weekly gain
Bitcoin is up 6.4% this week and on track for a second positive week.
Sentiment towards cryptocurrency markets was boosted by the , as lower rates release more liquidity that can then be directed towards speculative assets.
The Fed's cut marks the start of an easing cycle that analysts estimate could see rates cut by as much as 125 basis points by the end of the year.
But further gains in cryptocurrency and other broader risk-driven markets were still limited by comments from Federal Reserve Chairman Jerome Powell, who said the Fed's neutral rate will be higher than seen in the past.
His comments raised questions about how far interest rates will fall.
The Fed's massive cuts also raised some concerns about the state of the economy and whether growth will slow in the coming months.
Low interest rates were a key driver of crypto’s rally in 2021, though the sector has since seen a prolonged decline in retail interest. Spot Bitcoin exchange-traded funds provided a limited boost to trading volumes earlier this year.
Bitcoin has also largely remained within a narrow trading range for most of this year.
Cryptocurrency prices today: Altcoins rise, but brace for a mixed week
Cryptocurrency prices overall rose in tandem with Bitcoin, although altcoins were on track for a mixed weekly performance. Recent capital flows into cryptocurrencies have largely been directed towards Bitcoin and Ether, with the former largely maintaining its dominance over the market.
The world's No. 2 cryptocurrency rose 5.5% to $2,544.20 and was up 5.2% this week.
and rose between 0.2% and 7.2%, with a peak increase this week of 8.2%. The rest were on track for a flat to weak weekly performance.
Among meme tokens, it rose 2.4% and gained 1.2% this week.
