Despite its recent 15% gain this month, Bitcoin's current price of $76,622.70 has not convinced all industry experts that it has escaped the bear market that began in October, given that it remains 40% below its all-time high. Some forecasters are even predicting a potential drop to as low as $40,000, which would be a 70% decline from its peak. However, analyst James Check believes such a move is highly unlikely, describing it as statistically extraordinary.
Check references 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. At $40,000, Bitcoin would register as a 0.4th percentile event, meaning it would be an extremely rare occurrence. For perspective, Check notes that this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, whereas its current price is around the 31.5th percentile, which is historically weak but within normal correction ranges.
Check acknowledges that while no outcome has zero probability in markets, a $40,000 price point would be nearly unprecedented.