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 predict a potential drop to as low as $40,000, a 70% decline from its all-time high. Bitcoin analyst James Check considers such a move statistically extraordinary, although not impossible. Check referenced the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and realized price.
When modeled at $40,000, Bitcoin's price falls into the 0.4th percentile of all daily closes, indicating a highly unusual event. For perspective, this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, compared to its current price sitting around the 31.5th percentile, a historically weak but normal correction range. Check noted that while no market event has a zero probability, a $40,000 price point would be a near-unprecedented outcome.