If the Fed does not cut rates in 2025, the market could crash. Timothy Peterson warns that Bitcoin could fall as low as $70,000.
Network economist Timothy Peterson warns that if the US Federal Reserve postpones a rate cut in 2025, it could trigger a broader market crash, potentially driving Bitcoin back towards $70,000.
"There has to be a trigger. I think the trigger could simply be the Fed not cutting rates at all this year," Peterson said in a post on X on 8 March.
Bear Market Analysis 1/5
It's time to talk about the next bear market.
There's no reason to think it couldn't happen now. The valuation justifies it. What it needs is a trigger. I think that trigger may be as simple as the Fed not cutting rates at all this year. Powell said... pic.twitter.com/qqtsRdG0b4
Peterson's remarks came just a day after Federal Reserve Chairman Jerome Powell reiterated that he was in no hurry to change interest rates.
The postponement of a Fed rate cut could trigger a bear market
"We don't need to rush and we are well prepared to wait for more clarity," Powell said in a speech in New York on 7 March.
Peterson, author of Metcalfe's Law as a Model of Bitcoin's Value, estimated how far the Nasdaq could fall to predict Bitcoin's possible low in the "next bear market".
Using his model of the Nasdaq's future minimum price, he calculated that once the bear market begins, the Nasdaq will drop 17% in about seven months before bottoming out.
Applying a multiplier of "1.9" to that value for Bitcoin's decline, he estimated a 33% drop, which would bring BTC down to $57.000 from the current price of $83,000, according to CoinMarketCap data.
However, he said Bitcoin probably won't go that low, expecting the minimum price to be closer to the low $70s.000, based on historical trends since 2022.
"Traders and adventurers are circling Bitcoin like vultures," he said, explaining that once the market expects Bitcoin at $57,000, "it won't reach it because there are always investors who step in when the price is "low enough".
In 2022, Bitcoin didn't reach the expected low.
"I remember in 2022 everyone said the bottom would be $12,000. It only dropped to $16,000, 25% higher than expected," he noted, pointing out that 25% higher than $57,000 is $71,000.
Bitcoin touched the $71,000 area on 6 November, after the Donald Trump's victory in the US election, before rising for a month to reach $100,000 on 5 December.
In January 2025, BitMEX co-founder Arthur Hayes made a similar price prediction.
"I predict a correction of BTC between $70,000 and $75,000, a mini-financial crisis and a resumption of money printing, bringing Bitcoin to $250,000 by the end of the year," Hayes said in a post on X on 27 January.
In December 2024, mining company Blockware Solutions indicated that the "bearish scenario" for Bitcoin in 2025 would be $150,000, should the Federal Reserve reverse course by lowering interest rates.
The price of Bitcoin in 2025 would be $150,000, if the Federal Reserve reverses course by lowering interest rates.
Bitcoin 'whales' (1k-10k BTC wallet) resume accumulation. They added 29,600 BTC in 7 days, signalling confidence against retail panic. The price consolidates between $100,000 and $107,000.
Institutional inflows and steady demand offset the dampening effect of tighter monetary policy. Traders now look to the Federal Reserve's signals for direction this week.
Network economist Timothy Peterson warns that if the US Federal Reserve postpones a rate cut in 2025, it could trigger a broader market crash, potentially driving Bitcoin back towards $70,000.
"There has to be a trigger. I think the trigger could simply be the Fed not cutting rates at all this year," Peterson said in a post on X on 8 March.
X
Peterson's remarks came just a day after Federal Reserve Chairman Jerome Powell reiterated that he was in no hurry to change interest rates.
The postponement of a Fed rate cut could trigger a bear market
"We don't need to rush and we are well prepared to wait for more clarity," Powell said in a speech in New York on 7 March.
Peterson, author of Metcalfe's Law as a Model of Bitcoin's Value, estimated how far the Nasdaq could fall to predict Bitcoin's possible low in the "next bear market".
Using his model of the Nasdaq's future minimum price, he calculated that once the bear market begins, the Nasdaq will drop 17% in about seven months before bottoming out.
Applying a multiplier of "1.9" to that value for Bitcoin's decline, he estimated a 33% drop, which would bring BTC down to $57.000 from the current price of $83,000, according to CoinMarketCap data.
However, he said Bitcoin probably won't go that low, expecting the minimum price to be closer to the low $70s.000, based on historical trends since 2022.
"Traders and adventurers are circling Bitcoin like vultures," he said, explaining that once the market expects Bitcoin at $57,000, "it won't reach it because there are always investors who step in when the price is "low enough".
In 2022, Bitcoin didn't reach the expected low.
"I remember in 2022 everyone said the bottom would be $12,000. It only dropped to $16,000, 25% higher than expected," he noted, pointing out that 25% higher than $57,000 is $71,000.
Bitcoin touched the $71,000 area on 6 November, after the Donald Trump's victory in the US election, before rising for a month to reach $100,000 on 5 December.
In January 2025, BitMEX co-founder Arthur Hayes made a similar price prediction.
"I predict a correction of BTC between $70,000 and $75,000, a mini-financial crisis and a resumption of money printing, bringing Bitcoin to $250,000 by the end of the year," Hayes said in a post on X on 27 January.
In December 2024, mining company Blockware Solutions indicated that the "bearish scenario" for Bitcoin in 2025 would be $150,000, should the Federal Reserve reverse course by lowering interest rates.
The price of Bitcoin in 2025 would be $150,000, if the Federal Reserve reverses course by lowering interest rates.
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