Despite Bitcoin's recent 15% gain this month, some industry experts remain unconvinced that the largest 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, although analyst James Check deems such a move statistically extraordinary. 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 unprecedented outcome equivalent to it trading below $2 in 2011 on a relative basis. Currently, Bitcoin's price sits around the 31.5th percentile, a historically weak but normal correction range.
While Check acknowledges that no market event has zero probability, he considers a $40,000 price point a near-unprecedented statistical outcome.