Bitcoin surged on Thursday after the Federal Reserve cut interest rates by a wide margin and signaled the start of an easing cycle, though further gains were capped by a less dovish outlook.

The world’s largest cryptocurrency rose 2.9% to $62,121 by 10:45 Riyadh time. The token also broke out of the $50,000-$60,000 trading range that it has dominated over the past period and since the drop from the $73,000 peak early in the year, and Bitcoin’s ability to sustain the breakout in the 4-hour, daily and weekly candle closes will be monitored to ensure the new bullish level is maintained.

It is noteworthy that Bitcoin has achieved a weekly rise of more than 7% so far, while Ethereum has succeeded in rising by 4.6% in the last 24 hours, to trade at $2,438.37 per token.

Broader cryptocurrency prices also rose after the Federal Reserve cut interest rates, although strength in the U.S. Dollar Index limited overall gains.

Bitcoin Rises But Less Dovish Fed Forecast Caps Gains

The world’s largest cryptocurrency tracked a broader rally in risk-based assets as markets welcomed a 50 basis point rate cut by the Federal Reserve, as well as the start of the bank’s first easing cycle since 2020.

But that optimism was tempered somewhat by concerns about how fragile the Fed sees the US economy as, given that the 50 basis point cut was at the upper end of market expectations.

Federal Reserve Chairman Jerome Powell has calmed some concerns about the economy, noting that the risks between higher inflation and a weaker labor market are now evenly balanced.

But Powell also said the Fed has no intention of cutting interest rates to very low levels, and that the central bank’s neutral rate will be higher than in the past. His comments suggest a higher outlook for interest rates in the medium to long term. That notion has boosted the dollar.

While lower interest rates bode well for riskier, speculative assets like cryptocurrencies, they are unlikely to reach the lows seen during the COVID-19 pandemic. Ultra-low interest rates were a major driver of cryptocurrencies’ rally in 2021.

But since then, the industry has struggled with a series of regulatory crackdowns, as well as waning retail interest. The launch of spot bitcoin exchange-traded funds earlier this year provided only a fleeting boost.

Cryptocurrency Prices Today: Altcoins Rise Following Bitcoin

The broader cryptocurrency prices benefited from the improved risk appetite, rising alongside Bitcoin. Binance Coin (BNB) rose 2.06%, while Solana gained 5.5% to $138.6 per token.

Ripa also rose by 1.16% and Dogecoin by 2.5%, while Avalanche and Bitcoin Cash rose strongly by 9.6% and 9.8%, respectively.