Despite Bitcoin's recent surge of nearly 15% this month, some industry experts remain unconvinced that the largest cryptocurrency has exited the bear market that began in October, given 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 peak. Bitcoin analyst James Check deems such a move unlikely, stating it would be statistically extraordinary, though not impossible.
Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and volume-weighted average price measures. This index ranks Bitcoin's price historically. At $40,000, Bitcoin would register as a 0.4th percentile event, indicating an extremely rare occurrence. For perspective, Check notes this would be equivalent to Bitcoin trading at approximately $2 in 2011 on a relative basis.
Currently, the price is around the 31.5th percentile, which is historically weak but within normal correction ranges. Check emphasizes that while no market event has zero probability, a drop to $40,000 would be nearly unprecedented.