Despite Bitcoin's recent 15% gain this month, some industry experts believe it has not escaped the bear market that started in October, given it remains 40% below its record high. Some forecasters predict a significant drop to $40,000, a 70% decline from its all-time high. According to analyst James Check, such a move, although not impossible, would be statistically remarkable.
Bitcoin previously climbed to over $126,000 in October before sliding more than 50% to around $60,000 in February and then stabilizing near $78,000. Check scrutinizes the bearish predictions and refers to the Bitcoin Mean Reversion Index, which combines key valuation metrics. At $40,000, Bitcoin would rank in the 0.4th percentile of all daily closes, below any meaningful deviation. Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, whereas the current price is around the 31.5th percentile, historically weak but within normal correction ranges.
Check emphasizes that while there is no zero probability in markets, achieving $40,000 would be a nearly unprecedented outcome.