Bitcoin extends losses below $89,000 as Fed minutes outline two-sided risks, no preset path for rate cuts

Bitcoin extended its decline on Wednesday, falling to roughly $88,600, its lowest level since April and more than 5% below where it opened 2025.

The move coincided with the release of the Federal Reserve’s October meeting minutes, which emphasized “two-sided risks” facing the economy and showed officials deeply divided over how quickly to ease policy.

Several policymakers pointed to slower job gains, a rising unemployment rate, and fading labor demand as signs the economy is becoming more vulnerable to a sharper downturn.

At the same time, many said inflation has shown little sign of returning sustainably to its 2% target, with tariff-driven goods inflation and sticky service sector prices keeping them cautious about further easing.

Against that backdrop, officials stressed that policy is not on a preset course, and December’s decision still remains wide open.

Some participants said another rate cut could be warranted as the Fed inches toward a more neutral stance. Many others argued rates should remain unchanged for the rest of the year, given persistent inflation. One participant favored a larger 50-basis-point reduction, while another preferred no cut at all.

Prediction markets quickly repriced. On Polymarket, the odds of a quarter-point cut at the December meeting fell from about 52% to 30% after the minutes were released, while the probability of no change climbed from 46% to nearly 70%. CME FedWatch, a tool that tracks futures-implied rate expectations, showed virtually the same split. 

Fuel to the fire

That added layer of economic uncertainty is only exacerbating bitcoin’s ongoing market troubles.

On Wednesday, K33 Research’s Vetle Lunde warned that bitcoin’s derivatives market is entering a “dangerous” setup as traders pile on aggressive leverage into a deepening correction.

Perpetual futures open interest has surged by more than 36,000 BTC, the largest weekly increase since April 2023, while funding rates have flipped positive on expectations of a rebound that has yet to materialize.

Lunde described the behavior as “knife-catching” and said the current structure mirrors past periods that typically saw further declines.

He estimated a potential bottom forming in the $84,000–$86,000 zone, with risk of a deeper move toward April’s $74,500 low if selling accelerates.

Other top cryptocurrencies aren’t faring much better. Ethereum dropped to about $2,870 — its first break below $3,000 since July — while XRP has slumped toward the $2 mark, a level it hasn’t traded near in roughly five months. 

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