The recent 15% monthly gain of Bitcoin, currently priced at $76,054.61, has not convinced all industry experts that it has escaped the bear market that began in October, given that it still remains 40% below its record high. Some forecasters predict a potential downturn to as low as $40,000, a 70% decline from its all-time high.
Analyst James Check considers such a move unlikely, stating it would be statistically extraordinary, although not impossible. After reaching over $126,000 in October and then sliding more than 50% to around $60,000 in February before stabilizing, Bitcoin was trading near $78,000 on Friday.
Check suggests examining the predictions of bearish forecasters more closely. He references the Bitcoin Mean Reversion Index, which averages key valuation metrics such as the 200-week moving average and realized price. When modeled at $40,000, Bitcoin falls into the 0.4th percentile of all daily closes, indicating a historically rare event.
Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, in contrast to its current price sitting around the 31.5th percentile, which is historically weak but within normal correction ranges. Check emphasizes that while no market event has zero probability, a drop to $40,000 would be nearly unprecedented.