Analyst Timothy Peterson warns that the Federal Reserve’s decision to not cut rates in 2025 could lead to a bear market, potentially causing Bitcoin to decline to $70,000. He forecasts a 17% drop in the Nasdaq, similarly affecting Bitcoin. Historical trends suggest investor behavior may prevent a significant drop, keeping Bitcoin closer to the low $70,000 range, with other analysts echoing similar price predictions.

Timothy Peterson, a prominent economist, has indicated that the United States Federal Reserve’s decision to refrain from cutting interest rates in 2025 may catalyze a bear market, potentially bringing Bitcoin down to approximately $70,000. Speaking on March 8, Peterson highlighted that a lack of urgency in adjusting rates could serve as a critical trigger for market downturns. His comment followed remarks by Federal Reserve Chair Jerome Powell, who emphasized a cautious approach regarding interest rate adjustments.

During a speech in New York on March 7, Powell stated, “We do not need to be in a hurry and are well-positioned to wait for greater clarity.” Peterson, noted for his work “Metcalfe’s Law as a Model for Bitcoin’s Value,” utilized a future price prediction model for the Nasdaq to estimate Bitcoin’s potential decline in a market downturn. He projected that the Nasdaq could decrease by 17% in seven months, which, when applied to Bitcoin, would indicate a drop of about 33%, bringing its price to approximately $57,000.

Despite this projection, Peterson believes that Bitcoin may not reach such lows, predicting a more likely bottom in the low $70,000 range, referencing historical patterns from 2022. He articulated, “Traders and opportunists hover over Bitcoin like vultures,” suggesting that as the price nears $57,000, investor action may prevent it from reaching that threshold. Reflecting on past trends, Peterson noted that Bitcoin only fell to $16,000 in 2022, contrary to widespread predictions of a $12,000 bottom.

He indicated that based on this, a 25% increase from a possible drop to $57,000 would place Bitcoin at around $71,000. The last significant trading level for Bitcoin at $71,000 occurred on November 6, post Donald Trump’s election win, followed by a surge to $100,000 by December 5. Additionally, in January 2025, Arthur Hayes, co-founder of BitMEX, projected a similar price correction, indicating Bitcoin might experience a temporary dip between $70,000 and $75,000 before a recovery, potentially reaching $250,000 by year-end.

Moreover, Blockware Solutions posited that Bitcoin’s worst-case scenario for 2025 could see it valued at $150,000, contingent on the Federal Reserve’s policy changes regarding interest rates.

In summary, Timothy Peterson’s analysis predicts that a lack of rate cuts by the Federal Reserve in 2025 could destabilize the market, with Bitcoin potentially dipping towards $70,000. He believes that historical trends will impact investor behavior, preventing drastic declines. Additionally, projections from other analysts align with Peterson’s views, anticipating fluctuations in Bitcoin’s value that could ultimately lead to significant recoveries. Understanding these dynamics remains crucial for investors in the cryptocurrency space.

Original Source: cointelegraph.com

Related posts:

Increased Likelihood of Fed Rate Cut Boosts Bitcoin Prospects Ahead of December Meeting Federal Reserve Chair Jerome Powell’s Hawkish Comments Impact Cryptocurrency Markets Trump’s Election Sparks Crypto Concerns as Fed Signals Wall Street’s Crypto Embrace Bitcoin and XRP Fluctuate Following Mixed U.S. Jobs Report