Economic analyst Timothy Peterson cautions that if the US Federal Reserve refrains from cutting interest rates throughout 2025, it could set off a significant market decline, potentially pushing Bitcoin’s value down to around $70,000.
“All that’s needed is a catalyst. I believe that catalyst could be as straightforward as the Fed choosing not to cut rates at all this year,” Peterson shared in a March 8 post on X. His remarks followed a statement from Federal Reserve Chair Jerome Powell, who emphasized that there was no urgency in adjusting interest rates.
Delays in Rate Cuts Could Spark Bearish Sentiment
“We are in a position where we don’t need to rush and can afford to wait for more certainty,” Powell stated during a speech in New York on March 7.
Peterson, who authored the paper Metcalfe’s Law as a Model for Bitcoin’s Value, examined potential Nasdaq declines to estimate Bitcoin’s lowest point in a future bear market.
Based on his predictive model for the Nasdaq’s lowest price forward trend, Peterson estimated that once a downturn begins, the index could see a 17% drop over a span of roughly seven months before stabilizing.
Applying a “1.9x” multiplier to Bitcoin’s expected decline, he projected a 33% drop, which would see Bitcoin falling from its current value of $86,199 (as per CoinMarketCap data) to around $57,000.
However, Peterson suggested that Bitcoin likely won’t reach that level, predicting a support range closer to the low $70,000s based on historical trading behaviors from 2022.
“Bitcoin attracts traders and speculators like vultures,” he explained, adding that if the market anticipates a drop to $57,000, “it may not reach that point because investors tend to step in when they believe the price is sufficiently discounted.”
Bitcoin’s 2022 Price Floor Was Higher Than Expected
“Back in 2022, the consensus was that Bitcoin would bottom out at $12,000, yet it only dropped to $16,000—about 25% higher than expected,” Peterson noted. Applying the same principle, a 25% increase from $57,000 places Bitcoin’s potential floor around $71,000.
The last time Bitcoin hovered near the $71,000 mark was on November 6, following Donald Trump’s election victory, before surging to $100,000 by December 5.
In January 2025, BitMEX co-founder Arthur Hayes offered a similar forecast.
“I foresee Bitcoin correcting to the $70k–$75k range amid a mini financial crisis, followed by a return to monetary expansion that could drive it to $250k by year-end,” Hayes predicted in a January 27 X post.
Similarly, in December 2024, crypto mining firm Blockware Solutions projected Bitcoin’s worst-case scenario for 2025 to be around $150,000, assuming the Federal Reserve shifts its stance and resumes rate cuts.
For more news, find me on Twitter Giannis Andreou and subscribe to My channels Youtube and Rumble
What is your opinion on this particular topic? Leave us your comment below! We are always interested in your opinion!
