Despite Bitcoin's recent 15% gain this month, some experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given that it still lags 40% behind its record high. Some forecasters predict a potential drop to $40,000, a 70% decline from its all-time peak. However, analyst James Check considers such a move unlikely, stating it would be statistically remarkable. Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and volume-weighted average price measures.
When modeled at $40,000, Bitcoin's price falls into the 0.4th percentile of all daily closes, indicating an extraordinary event. For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, whereas the current price sits around the 31.5th percentile, historically weak but within normal correction ranges. Check emphasizes that while no outcome has zero probability in markets, a $40,000 Bitcoin price would be nearly unprecedented.