Source: Cointelegraph Original: "{title}"
Network economist Timothy Peterson warns that if the U.S. Federal Reserve does not cut interest rates by 2025, it could lead to a broader market downturn, potentially pulling Bitcoin's price back to around $70,000.
"The market needs a trigger. I think this trigger could be quite simple: the Fed not cutting rates at all this year," Peterson said in a post on X platform on March 8. Just a day before Peterson made these comments, Fed Chairman Jerome Powell reiterated that he is not in a hurry to adjust interest rates.
Delay in Fed rate cuts could trigger a bear market
"We don't need to rush; the current situation is very favorable, and we can wait for the market conditions to become clearer," Powell said in a speech in New York on March 7.
Source: Timothy Peterson
Peterson is the author of the paper "Modeling Bitcoin's Value Using Metcalfe's Law," and he predicts Bitcoin's potential bottom price in the "next bear market" by estimating the possible decline of the Nasdaq index.
According to Peterson's Nasdaq minimum price forecast model, he estimates that once the bear market begins, the Nasdaq index will decline by about 17% over approximately seven months before hitting bottom.
Calculating based on Bitcoin's decline being 1.9 times that of the Nasdaq, and according to CoinMarketCap data, he estimates that Bitcoin will drop by 33%, from the current price of $86,199 down to $57,000.
Source: Timothy Peterson
However, he stated that Bitcoin may not drop that much. Based on historical trends from 2022, he expects Bitcoin's bottom price to be closer to just above $70,000.
"Traders and speculators are like vultures, closely watching Bitcoin." He explained that once the market expects Bitcoin to drop to $57,000, "it won't reach that price because there will always be some investors who will enter the market because the price is 'low enough.'"
Bitcoin's low point in 2022 did not drop as expected
"I remember in 2022, everyone was saying that Bitcoin's bottom would be $12,000. But it only dropped to $16,000, which was 25% higher than expected." He said this before pointing out that a 25% increase from $57,000 would be $71,000.
The last time Bitcoin traded close to the $71,000 level was on November 6, when Trump won the U.S. election, after which Bitcoin continued to rise for a month, reaching $100,000 by December 5.
In January 2025, BitMEX co-founder Arthur Hayes also made a similar price prediction.
"I expect Bitcoin to pull back to between $70,000 and $75,000, experience a small financial crisis, and then start printing money again, which will push Bitcoin to $250,000 by the end of the year," Hayes said in a post on X platform on January 27.
In December 2024, cryptocurrency mining company Blockware Solutions stated that if the Fed changes its direction on rate cuts, Bitcoin's price under "bearish conditions" in 2025 would be $150,000.
Related: Michael Saylor urges the U.S. government to buy up to 25% of Bitcoin supply.
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