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 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 considers such a move statistically extraordinary.
Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank Bitcoin's price historically. At $40,000, Bitcoin would be at the 0.4th percentile of all daily closes, a level Check describes as 'below any meaningful deviation' and comparable to Bitcoin trading below $2 in 2011 on a relative basis. Currently, Bitcoin's price is at the 31.5th percentile, a historically weak but normal correction range. While Check acknowledges that no market event has a zero probability, he considers a drop to $40,000 a 'near-unprecedented outcome'.