Despite Bitcoin's recent 15% gain this month, some experts still believe it hasn't escaped the bear market that began in October, given its current price is 40% below its record high. Some forecasters predict a potential drop to $40,000, a 70% decline from its all-time peak.
According to analyst James Check, such a move would be statistically exceptional, albeit not impossible. Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and realized price.
At $40,000, Bitcoin would rank in the 0.4th percentile of all daily closes, a level Check describes as 'below any meaningful deviation' and equivalent to Bitcoin trading at $2 in 2011 on a relative basis. The current price sits at the 31.5th percentile, historically weak but within normal correction ranges. Check acknowledges that while no market event has zero probability, a $40,000 Bitcoin price would be a near-unprecedented outcome.