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 it still lags 40% behind its record high. Some forecasters predict a potential decline to as low as $40,000, a 70% drop from its all-time peak.
Analyst James Check considers such a move statistically extraordinary, though not impossible. Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank Bitcoin's price historically. A price of $40,000 would place Bitcoin in the 0.4th percentile of all daily closes, an outcome Check describes as 'below any meaningful deviation' and equivalent to Bitcoin trading at $2 in 2011 on a relative basis. The current price sits around the 31.5th percentile, historically weak but within normal correction ranges.
Check notes that while no market event has a zero probability, a drop to $40,000 would be 'near-unprecedented'.