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, with its value still 40% below its record high. Some forecasters are even predicting a potential drop to as low as $40,000, which would be a 70% decline from its all-time high.
Bitcoin analyst James Check considers such a move unlikely, stating it would be statistically extraordinary, although not impossible. Check references the Bitcoin Mean Reversion Index, which averages key valuation metrics, including the 200-week moving average and realized price. According to this index, a price of $40,000 would rank as a 0.4th percentile event, indicating a highly unusual market deviation. For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis.
Currently, the price sits around the 31.5th percentile, which is historically weak but within normal correction ranges. Check emphasizes that while no market event has a zero probability, a $40,000 price point would be a near-unprecedented outcome.