Despite Bitcoin's recent 15% gain this month, some industry experts remain skeptical that the cryptocurrency has escaped the bear market that began in October, given it still lags 40% behind its record high. Some forecasters have even predicted a potential drop to $40,000, a 70% decline from its all-time peak.
According to analyst James Check, such a move, although not impossible, would be statistically extraordinary. Check points to the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and volume-weighted average price measures, to rank Bitcoin's price historically.
At $40,000, Bitcoin would register as a 0.4th percentile event, meaning it would be below any significant deviation across major anchors. For perspective, Check notes that this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, whereas the current price sits around the 31.5th percentile, historically weak but within normal correction ranges. Check emphasizes that while no market event has zero probability, reaching $40,000 would be a nearly unprecedented outcome.