Despite Bitcoin's recent 15% gain this month, reaching $75,320.90, some industry experts remain unconvinced that the cryptocurrency has overcome the bear market that began in October, given it 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.
According to Bitcoin analyst James Check, such a move would be statistically extraordinary, albeit not impossible. Check references the Bitcoin Mean Reversion Index, which averages 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 0.4 event, falling in the 0.4th percentile of all daily closes, a deviation that Check describes as below any meaningful threshold.
For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, whereas the current price is around the 31.5th percentile, historically weak but within normal correction ranges. Check emphasizes that while there is no zero probability in markets, a $40,000 price point would be a near-unprecedented outcome.