Fed not cutting rates ‘at all’ in 2025 may trigger a bear market — Analyst

Community economist Timothy Peterson warns that if the US Federal Reserve holds off on fee cuts in 2025, it might trigger a broader market downturn, doubtlessly dragging Bitcoin again towards $70,000.

“What it wants is a set off. I believe 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 publish. 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 fee lower delay might spark bear market

“We don’t must be in a rush and are well-positioned to attend for better readability,” Powell said in a speech in New York on March 7.

Peterson, who’s the creator 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 type, 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.

Nevertheless, he stated Bitcoin doubtless gained’t drop that far, anticipating a backside nearer to the low $70,000 vary primarily based on historic tendencies from 2022.

“Merchants and opportunists hover over Bitcoin like vultures,” he stated, explaining that when the market expects Bitcoin to hit $57,000, “it gained’t get there as a result of there are at all times some traders who step in as a result of the worth is ‘low sufficient.”

Bitcoin’s 2022 low didn’t drop as anticipated

“I keep in mind in 2022 when everybody stated the underside can be $12k.  It solely went to $16k, 25% larger than anticipated,” he stated earlier than declaring that the 25% enhance 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 publish.

In December 2024, crypto mining firm Blockware Solutions stated 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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