Despite Bitcoin's recent 15% gains this month, reaching $77,752.61, some experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given 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 peak.
Analyst James Check considers such a move highly unlikely, describing it as statistically extraordinary, though not impossible. After peaking at over $126,000 in October and then sliding more than 50% to around $60,000 in February before stabilizing, Bitcoin was trading near $78,000 on Friday. Check argues that the predictions of bearish forecasters warrant closer examination. He references the Bitcoin Mean Reversion Index, which combines key valuation metrics such as the 200-week moving average, realized price, power law trend, and volume-weighted average price measures to rank Bitcoin's price historically.
According to this index, a price of $40,000 would place Bitcoin in the 0.4th percentile of all daily closes, an event Check describes as below any meaningful deviation across major anchors. For perspective, 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 no event has zero probability in markets, a decline to $40,000 would be a near-unprecedented outcome.