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 it still lags 40% behind its record high. Some forecasters predict a potential drop to as low as $40,000, a 70% decline from its all-time peak. Analyst James Check views such a move as unlikely, stating it would be statistically extraordinary, though not impossible.
Check cites the Bitcoin Mean Reversion Index, which combines key metrics like 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, a '0.4 event' that Check describes as 'below any meaningful deviation across all major anchors.' For perspective, Check equates this to Bitcoin trading below $2 in 2011 on a relative basis. Currently, the price sits around the 31.5th percentile, historically weak but within normal correction ranges. Check acknowledges that while there's no zero probability in markets, a $40,000 price point would be a near-unprecedented outcome.