Fed’s divided rate decision threatens Bitcoin’s comeback as December hike looms

The Federal Reserve held its target range at 3.75% to 4% on Oct. 28 on a 10-2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, favoring an immediate quarter-point hike.

Rate-market trackers put the odds of a December hike between about 83% and 88%, and the market had priced in a hold before the meeting.

Bitcoin dipped to $80,500 and recovered above $81,000, within reach of the roughly $81,500 aggregate cost basis of US spot Bitcoin ETFs that Glassnode estimates.

The committee called growth strong and repeated its commitment to returning inflation to 2%.

At his press conference, Chair Kevin Warsh acknowledged that credit conditions had tightened, credit spreads had widened, and higher rates were affecting technology investment, including AI.

He declined to describe overall financial conditions as tight, suggesting the Fed is willing to tolerate more market strain before changing course. The 10-year Treasury yield sat near 5.04% on decision day and the two-year near 4.78%, while the University of Michigan's final October sentiment index came in at 48.

Fabian Dori, chief investment officer at Sygnum Bank, said in a note:

“A hawkish hold is what the market expected, with no change for October and a 25bps hike for December priced in. Thursday's PCE, a key decision variable for the Fed, being released just one day after the Fed decision, will be used as a timely decision validation.”

Dori also points to Magnificent Seven earnings this week, which should clarify whether AI capital spending is turning into revenue, and to liquidity and financial conditions as the drivers toward December.

He said a resolution of the Strait of Hormuz situation after the midterms could ease oil prices, inflation, and rate expectations.

Glassnode's Oct. 28 report described a market in which long-term holders control about 4 million BTC acquired between $85,000 and $118,000, representing potential supply as prices recover.

Those coins sit apart from sell orders, since holders returning to breakeven choose whether to sell. About 4.3% of supply last moved between $84,000 and $85,000, though Glassnode attributes much of that to one internal wallet transfer in November 2025.

Since the Oct. 24 decline, about $3.4 million of Binance bids were left at $80,000. The largest cluster sat at $78,000 to $79,000 with about $42 million, up from roughly $24 million in mid-October. The True Market Mean sits near $77,900 and the short-term holder cost basis near $75,800.