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 that 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. Bitcoin analyst James Check considers such a move unlikely, stating that while not impossible, it would be statistically remarkable.
Check references the Bitcoin Mean Reversion Index, which averages key valuation metrics, including the 200-week moving average and volume-weighted average price measures. At $40,000, Bitcoin would rank in the 0.4th percentile of all daily closes, indicating a historically low price. Check notes that this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, emphasizing that the current price, while historically weak, remains within normal correction ranges.
Check cautions that while no market event has zero probability, a $40,000 Bitcoin price would be a near-unprecedented outcome.