Despite Bitcoin's recent 15% gain this month, some industry 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 as low as $40,000, a 70% decline from its all-time high. However, analyst James Check considers such a move highly unlikely, stating that it would be statistically extraordinary. Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics such as the 200-week moving average and realized price.
According to this index, a price of $40,000 would rank in the 0.4th percentile of all daily closes, indicating a historically rare event. Check notes that this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, emphasizing that while no market outcome has zero probability, a drop to $40,000 would be nearly unprecedented.