Bitcoin and altcoins are reacting to the recent speech by FOMC chair Jerome Powell. The interest rate drop could potentially increase the price of cryptocurrencies. The core inflation rate remains at around 2.5%, following a rise to 3.5% caused by the disruptions of the COVID-19 pandemic. There is a suggestion that the Federal Reserve might pause the ongoing interest rate hike, which could prompt investors to diversify their portfolios with assets like Bitcoin and altcoins.
Bitcoin has responded more favorably to these developments compared to altcoins. According to Santiment, Bitcoin stood to gain the most from the committee chair’s comments. Bitcoin’s Social Dominance has notably risen, standing at over 24% at press time, indicating its dominance in discussions within the cryptocurrency space.
Ethereum, representing altcoins, also experienced a rise in Social Dominance, but it remained below 10% at press time. These shifts in Social Dominance often indicate a sufficient level of fear associated with ongoing price increases.
Examining the funding rates of Bitcoin and Ethereum showed different trends. Coinglass analysis revealed that Bitcoin’s Funding Rate was around 0.0084%, while Ethereum’s Funding Rate was around 0.010%. This suggests that ETH is attracting more funding than BTC, with traders betting more on ETH.
At the time of writing, Bitcoin was trading at around $38,800, reflecting a less than 1% increase in value. Ethereum was trading at around $2,100, showing an almost 1% increase. The FOMC is scheduled to meet later in December to announce the new interest rate.