BTC Sinks to $88K as Fed Minutes Slash December Rate-Cut Odds

BTC Drops to Multi-Month Lows as Fed Minutes Hit Risk Appetite

BTC extended its tradeoff on Wednesday, falling to roughly 88,600 dollars — its lowest level since April and more than 5 percent below its 2025 opening price. The decline followed the release of the Federal Reserve’s October meeting minutes, which revealed one of the most divided policy debates among officials in years.

The minutes highlighted “two-sided risks” facing the U.S. economy. Some policymakers pointed to sluggishing job growth, a rising unemployment rate and fragileening labor demand as signs the economy is becoming more fragile. Others warned that inflation remains too sticky, with tariff-driven excellents inflation and persistent services prices preventing the central bank from signaling a clear easing path.

Officials stressed that monetary policy is “not on a preset course,” leaving December’s decision wide open. Views ranged widely: one participant argued for a larger 50-basis-point cut, another preferred no cut at all, and most leaned toward either a 25-bp move or staying on hold.

Markets reacted immediately. On Polymarket, the probability of a December rate cut sank from 52 percent to around 30 percent. Odds of no change rose from 46 percent to nahead 70 percent. CME FedWatch reflected a nahead identical repricing.

Investor Takeaway

Leverage Builds as BTC Falls Below Key Technical Levels

The macro uncertainty collided with dangerous behavior in the . K33 Research’s Vetle Lunde warned Wednesday that perpetual futures positioning has entered a “knife-catching” phase, with traders aggressively adding leverage into a falling market.

Open interest surged by more than 36,000 BTC in a single week — the largest increase since April 2023. Funding rates have turned positive, showing traders are paying a premium to maintain long positions despite the downtrend.

Lunde said the setup resembles past periods that preceded further declines. He estimated a possible short-term bottom in the 84,000 to 86,000 dollar range, but warned that a breakdown could send BTC toward April’s 74,500 dollar low if tradeing accelerates.

The technical picture has deteriorated sharply:

• BTC has traded below its 365-day moving average for six consecutive days. This long-term trend line typically acts as a .
• The 50-day exponential moving average has crossed below the 200-day EMA. This “death cross” has historically signaled momentum loss and downside risk.
• Sentiment is near yahead lows. The sits at 16, indicating extreme caution among investors.

Analyst Benjamin Cowen said the timing for a bounce is tightening. “The time for BTC to bounce, if the cycle is not over, would begin within the next week,” he said. Without a rebound, he expects “another dump before a larger rally back to the average,” which could form a macro lower high.

ETH dropped to around 2,870 dollars, its first break below 3,000 since July, while XRP fell toward the 2-dollar level, a price it hasn’t revisited in about five months.

Rate-Cut Odds Collapse as Crypto Market Fear Deepens

The broader macro backdrop continues to pressure risk assets. Expectations for a December rate cut plunged across major forecasting tools:

• CME futures: Odds fell from roughly 67 percent earlier this month to 33 percent.
• Kalshi prediction markets: Pricing suggests a 70 percent chance of a cut.
• Polymarket: Traders view about a 67 percent chance of easing.

While prediction platforms lean more dovish, futures traders appear increasingly convinced the Fed may stay on hold due to persistent inflation. Analysts say the divergence reflects rising uncertainty as the central bank weighs recession risk against price stability concerns.

Meanwhile, crypto sentiment has deteriorated sharply. The Crypto Fear & Greed Index hovering just above its yahead low suggests investors are preparing for further volatility. Some analysts warn that the market’s inability to hold could signal the ahead stages of a broader crypto downturn.

Investor Takeaway

What Comes Next for BTC?

The next two weeks appear critical. Analysts say BTC must regain support above long-term moving averages to avoid deeper structural fragileness. A bounce could keep the broader cycle intact. Failure would raise the risk of revisiting the low-to-mid-70,000 range before any sustained recovery later in 2025.

As the macro picture remains fluid, traders are watching two variables closely: the Fed’s December decision and whether leveraged long positions unwind in an orderly fashion or trigger a sharper liquidation wave.

For now, extreme fear, elevated open interest and technical breakdowns suggest the market remains fragile heading into year-end.