Network economist Timothy Peterson cautions that if the US Federal Reserve refrains from rate cuts in 2025, it could lead to a wider market decline, potentially pulling Bitcoin back towards $70,000.
“What it needs is a trigger. I believe that trigger could simply be the Fed not cutting rates at all this year,” Peterson stated in a March 8 X post. His remarks follow closely after Federal Reserve Chair Jerome Powell emphasized that there is no urgency to modify interest rates.
Delayed Fed rate cuts might ignite bear market
“We do not need to be hasty and are well-prepared to await clearer signals,” Powell said during a speech in New York on March 7.
Source: Timothy Peterson
Peterson, author of the paper “Metcalfe’s Law as a Model for Bitcoin’s Value,” speculated on how low the Nasdaq could dip to forecast Bitcoin’s (BTC) potential bottom in “the upcoming bear market.”
Utilizing his Nasdaq lowest price forward model, Peterson projected that the bottom would take about seven months to form, with the Nasdaq expected to drop by 17% during this timeframe.
With a multiplier of “1.9” applied to this figure for Bitcoin’s fluctuation, he predicted a 33% drop for Bitcoin, reducing it to $57,000 from its then-publication price of $86,199, according to CoinMarketCap data.
Source: Timothy Peterson
However, he anticipates that Bitcoin likely won’t decline to that level, expecting a bottom closer to the low $70,000 range based on historical trends from 2022.
“Traders and opportunists circle Bitcoin like vultures,” he described, indicating that as soon as the market speculates Bitcoin will hit $57,000, “it won’t reach that point since there are always investors ready to step in when the price is deemed ‘low enough.’”
Bitcoin’s 2022 low did not drop as anticipated
“I recall in 2022 when everyone projected the bottom would be at $12K. It only reached $16K, which was 25% higher than expected,” he noted, before pointing out that a similar 25% increase from $57,000 would land at $71,000.
The last occasion Bitcoin traded around the $71,000 mark was on November 6, following Donald Trump’s election victory, before soaring for a month to reach $100,000 by December 5.
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In January 2025, BitMEX co-founder Arthur Hayes reiterated a comparable price prediction.
“I predict a $70K to $75K correction in BTC amidst a mini financial crisis, followed by a resumption of money printing that could drive us to $250K by year’s end,” Hayes mentioned in a January 27 X post.
In December 2024, the crypto mining firm Blockware Solutions projected Bitcoin’s “bear case” for 2025 at $150,000, assuming the Federal Reserve changes its stance on interest rate cuts.
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