Despite Bitcoin's recent 15% gain this month, some industry experts remain skeptical that the cryptocurrency has escaped the bear market it entered in October, given that it still lags 40% behind its record high. Some forecasters are even predicting 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 remarkable. Check points to 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, indicating a historically low value. For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, emphasizing that while no market event has a zero probability, a drop to $40,000 would be a near-unprecedented outcome.