Bitcoin continued its decline on Wednesday, falling to around $88,600, its lowest level since April and more than 5% below where it opened in 2025.
This move coincided with the Federal Reserve’s interest rate release October meeting minuteswhich highlighted the “two-sided risks” facing the economy and showed that officials were deeply divided over how quickly to ease policies.
Several policymakers pointed to slower job growth, rising unemployment and declining labor demand as signs that the economy is becoming more vulnerable to a sharper downturn.
At the same time, many say inflation shows little sign of a sustainable return to the 2% target, with rate-driven goods inflation and stubborn service sector prices keeping them cautious about further easing.
Against that backdrop, officials emphasized that the policy is not on a predetermined course and that the December decision remains wide open.
Some participants said another rate cut could be justified as the Fed moves toward a more neutral stance. Many others argued that rates should remain unchanged for the rest of the year given persistent inflation. One participant favored a larger cut of 50 basis points, while another favored no cut at all.
Prediction markets quickly repriced. At Polymarkt, the chance of a quarter point drop at the December meeting fell from about 52% to 30% after the minutes were released, while the probability of no change rose from 46% to almost 70%. CME Fed Watchan instrument that tracks futures-based interest rate expectations showed much the same distribution.
Fuel the fire
That added layer of economic uncertainty only exacerbates Bitcoin’s ongoing market woes.
On Wednesday, K33 Research’s Vetle Lunde warned that Bitcoin’s derivatives market is entering a “dangerous” situation as traders pile on aggressive leverage in a deeper correction.
Perpetual futures open interest has risen by over 36,000 BTC, the largest weekly increase since April 2023, while funding rates have turned positive on expectations of a recovery yet to occur.
Lunde described the behavior as “knife-catching” and said the current structure reflects previous periods that typically saw further declines.
He assessed a potential bottom formation in the $84,000-$86,000 zone, with the risk of a deeper move towards the April low of $74,500 if selling accelerates.
Other top cryptocurrencies are not doing much better. Ethereum fell to around $2,870 – its first break below $3,000 since July – while XRP has fallen towards $2, a level it hasn’t traded close to in about five months.
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