Bitcoin Extends Losses Below $89,000 as Fed Minutes Outline 2-Sided Risks, No Preset Path For Rate Cuts

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. 

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.