Community economist Timothy Peterson warns that if the US Federal Reserve holds off on price cuts in 2025, it could trigger a broader market downturn, doubtlessly dragging Bitcoin again towards $70,000.
“What it wants is a set off. I feel that set off could also be so simple as the Fed not chopping charges in any respect this 12 months,” Peterson said in a March 8 X put up. Peterson’s remark comes only a day after Federal Reserve chair Jerome Powell reiterated that he is in no hurry to regulate rates of interest.
Fed price reduce delay could spark bear market
"We don't must be in a rush and are well-positioned to attend for larger readability,” Powell said in a speech in New York on March 7.
Supply: Timothy Peterson
Peterson, who's the writer of the paper “Metcalfe’s Legislation as a Mannequin for Bitcoin’s Worth,” estimated how low the Nasdaq might fall to foretell Bitcoin’s (BTC) potential backside in “the subsequent bear market.”
Utilizing Peterson’s Nasdaq lowest worth ahead mannequin, Peterson estimated that the underside would take about seven months to kind, with the Nasdaq dropping 17% over the interval.
Making use of a “1.9” occasions multiplier to that quantity for Bitcoin’s decline, he estimated a 33% decline in Bitcoin, bringing it all the way down to $57,000 from its present worth at publication, $86,199, according to CoinMarketCap information.
Supply: Timothy Peterson
Nonetheless, he mentioned Bitcoin doubtless received’t drop that far, anticipating a backside nearer to the low $70,000 vary based mostly on historic traits from 2022.
“Merchants and opportunists hover over Bitcoin like vultures,” he mentioned, explaining that when the market expects Bitcoin to hit $57,000, “it received’t get there as a result of there are all the time some traders who step in as a result of the worth is ‘low sufficient.”
Bitcoin's 2022 low didn’t drop as anticipated
“I bear in mind in 2022 when everybody mentioned the underside can be $12k. It solely went to $16k, 25% greater than anticipated,” he mentioned earlier than mentioning that the 25% improve from $57,000 is $71,000.
The final time Bitcoin traded on the $71,000 worth stage was on Nov. 6, after Donald Trump won the US election, earlier than rallying for a month and reaching $100,000 by Dec. 5.
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In January 2025, BitMEX co-founder Arthur Hayes echoed the same worth prediction.
“I'm calling for a $70k to $75k correction in BTC a mini monetary disaster, and a resumption of cash printing that may ship us to $250k by the top of the 12 months,” Hayes said in a Jan. 27 X put up.
In December 2024, crypto mining firm Blockware Solutions mentioned Bitcoin’s “bear case” for 2025 can be $150,000, assuming the Federal Reserve reverses course on rate of interest cuts.
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