- Bitcoin’s social dominance skyrocketed after a speech by FOMC Chairman Jerome Powell.
- A drop in interest rates could push up the price of all cryptocurrencies.
In a statement released by the F.O.M.C on December 1, the chairman of the committee reported that core inflation remained around 2.5%.
This inflation rate followed an increase to around 3.5% due to the disruptions caused by the COVID-19 pandemic. The chairman attributed this increase mainly to increased demand in combination with a decrease in supply.
Although the chairman has not explicitly stated this, there is a suggestion that the Federal Reserve could halt the continued rate hike.
Such a pause could prompt investors to diversify their portfolios and focus on assets like Bitcoin [BTC] And altcoins.
Bitcoin’s social dominance rises above that of altcoins
Recent data indicated that Bitcoin responded more favorably to these developments than altcoins. According to the analysis of AMBCrypto via SantimentBitcoin could benefit the most from the committee chairman’s recent comments.
Our analysis showed a notable rise in Bitcoin’s social dominance on December 1. At the time of writing, the benchmark stood at over 24%, implying that the king coin dominated over 24% of discussions within the cryptocurrency space.
Source: Santiment
Ethereum [ETH], which represents the altcoins, also saw a rise in social dominance. However, it did not reach the levels observed for Bitcoin as it remained below 10% at the time of writing.
These shifts in social dominance usually indicate a sufficient level of fear, usually associated with persistent price increases.
What about the financing rates?
Research into Bitcoin and Ethereum funding rates showed several trends at the time of writing. AMBCrypto’s analysis of Mint glass showed that the financing rate of the king coin was approximately 0.0084% at the time of writing.
Meanwhile, Ethereum’s funding rate was around 0.010%. This suggested that ETH attracted more funding than BTC. While both assets are expected to rise, traders were betting more on ETH than BTC.
Read Ethereums [ETH] Price prediction 2023-24
At the time of writing this article, Bitcoin was trading around $38,800, reflecting an appreciation of less than 1%. Moreover, Ethereum was trading around $2,100, showing an increase of almost 1%.
The FOMC will meet later in December and the new interest rate will be announced.