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 its current price is still 40% below its record high. Some forecasters predict a potential drop to as low as $40,000, a 70% decline from its all-time high, although analyst James Check believes such a move is unlikely and 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, to rank bitcoin's price on a historical percentile basis. At $40,000, bitcoin would register as a '0.4 event', indicating it would fall in the 0.4th percentile of all daily closes, an exceptionally rare occurrence.
This would be equivalent to bitcoin trading below $2 in 2011 on a relative basis, compared to its current price sitting around the 31.5th percentile, which is historically weak but within normal correction ranges. Check notes that while no market event has a zero probability, a $40,000 bitcoin price would be a nearly unprecedented outcome.