Author: Ciaran Lyons, CoinTelegraph; Translator: Tong Deng, Jinse Finance

Economist Timothy Peterson warns that if the Federal Reserve delays rate cuts until 2025, it could lead to a broader market downturn and potentially drag Bit back to $70,000.

"It needs a trigger. I think that trigger could be as simple as the Fed not cutting rates at all this year," Peterson said in a March 8 X post. Just a day before Peterson's comments, Federal Reserve Chair Jerome Powell reiterated that he is in no rush to adjust interest rates.

Delayed Fed rate cuts could trigger a bear market

"We don't need to be in a hurry, we have the ability to wait for clearer information," Powell said in a March 7 speech in New York.

Peterson, the author of the paper "Metcalfe's Law as a Model for Bit Valuation," estimated how low the Nasdaq index could fall to predict Bit's potential bottom in the "next bear market."

Using Peterson's forward model of Nasdaq's lowest price, he estimates that once the bear market begins, the Nasdaq will drop 17% within about seven months before hitting bottom.

According to CoinMarketCap data, he multiplied this amount by a "1.9" factor for Bit's decline, estimating Bit would drop 33% from its current price of $86,199 at the time of publication to $57,000.

However, he said Bit may not drop that low, and based on 2022 historical trends, the bottom is expected to be around the $70,000 range.

"Traders and opportunists are circling Bit like vultures," he said, explaining that once the market expects Bit to reach $57,000, "it won't get there because there will always be some investors who step in because the price is 'low enough.'"

Bit's 2022 low did not drop as much as expected

"I remember in 2022, everyone said the bottom was $12,000. It only went up to $16,000, 25% higher than expected," he said, noting that a 25% increase from $57,000 is $71,000.

Bit last traded around $71,000 on November 6, when Donald Trump won the US election, then rallied for a month and reached $100,000 on December 5.

In January 2025, BitMEX co-founder Arthur Hayes also made a similar price forecast.

Hayes said in a January 27 X post: "I expect BTC to retrace to $70,000 to $75,000, which is a minor financial crisis, and money printing will resume, taking us to $250,000 by year-end."

In December 2024, crypto mining company Blockware Solutions said that if the Fed reverses its rate cut direction, Bit's "bear market scenario" in 2025 would be $150,000.