- Bitcoin’s Social Dominance jumped after a speech from FOMC chair Jerome Powell.
- A drop in the interest rate could drive up the price of all cryptocurrencies.
In a statement released by the FOMC on the 1st of December, the committee chair reported that the core inflation rate remained at around 2.5%.
This inflation rate followed a rise to around 3.5% caused by the disruptions caused by the COVID-19 pandemic. Notably, the chair attributed this surge to increased demand coupled with a decline in supply.
Although the chair did not explicitly state it, there is a suggestion that the Federal Reserve might pause the ongoing interest rate hike.
Such a pause could prompt investors to diversify their portfolios, bringing attention to assets like Bitcoin [BTC] and altcoins.
Bitcoin’s social dominance rises above altcoins’
Recent data indicated that Bitcoin responded more favorably to these developments compared to altcoins. As per AMBCrypto’s analysis via Santiment, Bitcoin stood to gain the most from the committee chair’s recent comments.
Our analysis showed a notable rise in Bitcoin’s Social Dominance on the 1st of December. At press time, the metric stood at over 24%, implying that the king coin dominated over 24% of discussions within the cryptocurrency space.
Source: Santiment
Ethereum [ETH], representing the altcoins, also experienced a rise in Social Dominance. However, it did not reach the level observed for Bitcoin, as it remained below 10% at press time.
These shifts in Social Dominance typically indicate a sufficient level of fear, typically associated with ongoing price increases.
What about funding rates?
Examining the funding rates of Bitcoin and Ethereum showed different trends at press time. AMBCrypto’s analysis of Coinglass showed that the king coin’s Funding Rate was around 0.0084% at press time.
Meanwhile, Ethereum’s Funding Rate was around 0.010%. This suggested that ETH was attracting more funding than BTC. Although both assets are anticipated to experience a rise, traders were betting more on ETH, compared to BTC.
Read Ethereum’s [ETH] Price Prediction 2023-24
At the time of this writing, Bitcoin was trading at around $38,800, reflecting a less than 1% increase in value. Also, Ethereum was trading at around $2,100, showing an almost 1% increase.
The FOMC is scheduled to meet later in December, during which the new interest rate will be announced.
