The price of Bitcoin, the top cryptocurrency, has managed to reclaim the $65,000 level on major spot exchanges.
Earlier this Wednesday, it peaked at $65,770 on the Bitstamp exchange after surging by more than 6%.
This came after Jerome Powell signaled that interest rates are currently at their peak, adding that he expects at least three cuts to happen this year.
Powell has said that a "significant weakening in the labor market" would prompt the Fed to lower interest rates.
The future direction will depend on the upcoming data, the central bank head added.
With that being said, Powell does not expect rate cuts to go back to ultra-low levels.
Lower interest rates typically favor risk-on assets of the likes of Bitcoin, which is why the most recent price spike is not surprising. Risk assets react in a positive way to excess liquidity.
Earlier today, the cryptocurrency plunged to as low as the $60,900 level due to concerns about high Bitcoin exchange-traded fund (ETF) outflows following a streak of robust inflows.
As reported by U.Today, market participants were also concerned about the Fed's stance on future rate cuts. Some traders hedged their bets since they anticipated that Powell could potentially adopt a more hawkish tone. Now that the rate cut outlook appears to be steady, the Bitcoin price is hitting new intraday highs.
Still, it remains to be seen whether this recovery will be enough for Bitcoin to resume its uptrend. It is worth noting that the largest cryptocurrency is still down 11% from its all-time high of $73,737.