Despite Bitcoin's recent 15% gain this month, reaching $76,300.81, some industry experts remain unconvinced that the largest 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 high.
Bitcoin analyst James Check views such a move as unlikely, stating it would be statistically extraordinary, albeit not impossible, in a post on X. Following its surge over $126,000 in October, Bitcoin slid more than 50% to around $60,000 in February before stabilizing, and was trading near $78,000 on Friday. Check suggests examining the bearish predictions more closely. He references the Bitcoin Mean Reversion Index, a composite model averaging key valuation metrics such as the 200-week moving average, realized price, power law trend, and volume-weighted average price measures.
The index historically ranks Bitcoin's price. At $40,000, Bitcoin would register as a '0.4 event,' placing it in the 0.4th percentile of all daily closes. Check notes this would be below any meaningful deviation across major anchors.
For context, he equates this to Bitcoin trading below $2 in 2011 on a relative basis. In contrast, the current 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, this outcome would be near-unprecedented.