![[Bitop Review] Bitcoin Crashes to $88K: Can Nvidia Earnings Save the Crypto Market?](/api/image-proxy?url=https%3A%2F%2Facademy-public.coinmarketcap.com%2Fsrd-optimized-uploads%2F3d4891252205483fb1f7efb0985849cd.jpg)
The S&P 500 index concluded its four-day losing streak as the Federal Reserve released its October meeting minutes, revealing divided opinions among its officials. This development has led to a significant drop in traders' expectations for a December interest rate cut. The probability of a 25-basis-point rate reduction on December 10 has fallen to 32%, according to the CME FedWatch Tool. Market uncertainty remains high due to missing data and the ongoing impact of tariffs.
Fed Meeting Minutes Reveal Internal Divisions on Interest Rates
The minutes from the Federal Reserve's October meeting indicate a divergence of views among central bank officials. A notable portion of these officials believe that maintaining current interest rate levels may be appropriate for the remainder of 2025. This sentiment has directly influenced market expectations, with traders now assigning a lower probability to an imminent rate cut.
Bitcoin Experiences Significant Price Drop Amidst Market Correction
Bitcoin (BTC) has seen a substantial decline, falling more than 10% over the past week. The cryptocurrency reached a low of $88,608 last night, marking its lowest point since late April. This downturn has impacted the broader cryptocurrency market, with Ethereum (ETH) also experiencing a drop to $2,873.
The overall sentiment in the crypto market remains fragile, despite some temporary gains observed after Nvidia's strong earnings announcement. The Fear & Greed Index is currently positioned in the extreme fear zone at 16, reflecting widespread investor apprehension.
Massive Liquidations Across Crypto Network
The recent market correction has resulted in significant liquidations across the cryptocurrency network. In the past 24 hours, positions valued at $662 million have been liquidated. Ethereum accounted for the largest portion of these liquidations, with $222 million, followed by Bitcoin at $170 million.
K33 Report Highlights Intensified Leverage and Potential for Further Bitcoin Decline
A report from K33 indicates that leverage in the Bitcoin derivatives market has intensified significantly during the current correction. Traders are reportedly adding aggressive leverage as Bitcoin experiences a deepening downturn, falling over 10% in the past week and reaching a low of $88,608.
The report details that open interest in perpetual futures has surged by over 36,000 Bitcoin in a single week, the largest increase since April 2023. Furthermore, funding rates are rising, suggesting that traders are attempting to profit from a falling market rather than adopting defensive strategies.
K33's analysis suggests that the increasing funding rates may be a result of resting limit orders being filled, driven by hopes of a swift market rebound. However, the absence of such a bounce has led to this leverage becoming an overhang, increasing the risk of amplified volatility due to liquidations.
In contrast, premiums on CME futures are near their yearly lows, and the term structure remains narrow. This indicates a prevailing risk-averse sentiment among institutional investors. K33 cautions that historical patterns suggest such divergences often precede further price declines.
According to K33's estimates, the potential bottom for Bitcoin could lie between $84,000 and $86,000. If selling pressure escalates, the price could potentially drop further, reaching the April low of $74,433.