The recent surge in Bitcoin's value, with a nearly 15% increase this month, has not convinced all industry experts that the largest cryptocurrency has escaped the bear market that began in October, given that it remains 40% below its record high. Some forecasters are even predicting a potential decline to as low as $40,000, which would represent a 70% drop from its all-time peak. Bitcoin analyst James Check views such a scenario as unlikely, stating that while not impossible, it would be statistically remarkable. Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank Bitcoin's price historically.
He notes that a price of $40,000 would place Bitcoin in the 0.4th percentile of all daily closes, an extremely low ranking. Check emphasizes that this would be equivalent to Bitcoin trading at approximately $2 in 2011 in relative terms, contrasting with its current price, which is around the 31.5th percentile, a historically weak but normal correction range.
Check cautions that while no market event has zero probability, a drop to $40,000 would be a nearly unprecedented outcome.