The recent 15% increase in Bitcoin's value this month has not convinced all industry experts that the cryptocurrency has escaped the bear market that began in October, given that it still remains 40% below 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 views such a move as unlikely, stating that while not impossible, it would be statistically remarkable. Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank the cryptocurrency's price historically. According to this index, a price of $40,000 would place Bitcoin in the 0.4th percentile of all daily closes, an extremely low ranking.
This would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis. In contrast, the current price is around the 31.5th percentile, which is historically weak but within normal correction ranges. Check notes that while there is no zero probability in markets, a $40,000 price point would be a nearly unprecedented outcome.