• Bitcoin is poised for a second consecutive week of gains, supported by the recent 50-basis-point cut in interest rates by the Federal Reserve.
• Bitcoin broke above several key technical resistances this week, signaling a rally continuation.
• US spot Bitcoin ETFs posted $305.20 million in inflows until Thursday.

Bitcoin (BTC) has risen 7% so far this week, supported by the US Federal Reserve (Fed) interest-rate cut and more than $300 million in ETFs inflows. The recent surge led BTC price to shatter several key technical resistance levels, a sign that the current two-week rally has likely some more way to go towards $65,000.

Macroeconomics supports Bitcoin's gains

Bitcoin rose 7% this week to trade above $63,000. These gains were mostly caused by the US Federal Reserve’s 50-basis-point (bps) cut in interest rates on Wednesday. This big rate cut is generally considered a bullish sign for cryptocurrencies, stocks, and global risk markets. Lower borrowing costs generally provide more purchasing power for investors, who would invest their money into assets rather than keep it in the bank.

The Lookonchain chart below further explains how the Federal Reserve Rate has historically impacted Bitcoin’s Price.

At the start of the COVID crisis in 2020, the Federal Reserve aggressively cut interest rates, bringing them to the 0%-0.25% range. The low interest rate environment sparked a rally in Bitcoin’s price, which surged from around $5,000 to $60,000. 

Still, the Covid-19 pandemic era is a tricky time to compare with because many other factors come into play to explain the surge in crypto prices, from the direct rounds of stimulus checks received by US households to the fact that lockdowns made it very difficult for consumers to spend money in leisure activities outdoors.

Conversely, the rate hikes between March and December 2022, increasing rates to the 4.25%-4.50% range, negatively impacted Bitcoin, causing its price to plummet from approximately $46,000 to $16,000.