Despite Bitcoin's recent gains of nearly 15% this month, with its price at $77,280.16, some industry experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given it is still 40% below its record high. Some forecasters predict a potential drop to as low as $40,000, which would represent a 70% decline from its all-time high. Bitcoin analyst James Check considers such a move unlikely, describing it as statistically extraordinary, though not impossible.
Check references the Bitcoin Mean Reversion Index, which averages key valuation metrics like the 200-week moving average and realized price. When modeled at $40,000, Bitcoin falls into the 0.4th percentile of all daily closes, a level Check describes as below any meaningful deviation across major anchors, equivalent to Bitcoin trading below $2 in 2011 on a relative basis. Today's price sits around the 31.5th percentile, historically weak but within normal correction ranges.
Check acknowledges that while no market event has zero probability, a drop to $40,000 would be a near-unprecedented outcome.