Despite Bitcoin's recent 15% gain this month, some industry experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given its current price is still 40% below its record high. Some forecasters have even predicted a potential drop to as low as $40,000, a 70% decline from its all-time high.
However, according to Bitcoin analyst James Check, such a move would be statistically remarkable, albeit not impossible. Check referenced the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and volume-weighted average price measures. When modeled at $40,000, Bitcoin falls into the 0.4th percentile of all daily closes, indicating a historically low price. For perspective, Check noted that this would be equivalent to Bitcoin trading below $2 in 2011, relative to its price at the time.
In contrast, the current price sits around the 31.5th percentile, which is historically weak but within normal correction ranges. Check emphasized that while no market event has a zero probability, a $40,000 price point for Bitcoin would be a nearly unprecedented outcome.