The recent 15% increase in Bitcoin's value this month has not convinced all industry experts that it has escaped the bear market that started in October, given that it still remains 40% below its record high. Some forecasters predict a potential drop to as low as $40,000, which is a 70% decline from its all-time high. According to Bitcoin analyst James Check, such a move would be statistically extraordinary, although not impossible.
Check points to the Bitcoin Mean Reversion Index, which combines multiple key valuation metrics, including the 200-week moving average and realized price, to rank bitcoin's price on a historical percentile basis. If bitcoin were to drop to $40,000, it would register as a 0.4th percentile event, meaning it would fall in the 0.4th percentile of all daily closes. Check notes that this would be equivalent to bitcoin trading below $2 in 2011 on a relative basis, and describes it as a 'near-unprecedented outcome'.