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 it still lags 40% behind its record high. Some forecasters predict a potential drop to $40,000, a 70% decline from its all-time high.
However, Bitcoin analyst James Check considers such a move to be statistically extraordinary, albeit not impossible. Check referenced the Bitcoin Mean Reversion Index, which combines key valuation metrics such as the 200-week moving average and realized price. When modeled at $40,000, Bitcoin's price falls into the 0.4th percentile of all daily closes, a '0.4 event' that is below any meaningful deviation across major anchors. This would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis.
Currently, the price sits around the 31.5th percentile, which is historically weak but within normal correction ranges. Check emphasized that while there's no zero probability in markets, a drop to $40,000 would be a near-unprecedented outcome.