Despite Bitcoin's recent 15% gain this month, reaching $76,948.05, some industry experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given it is still 40% below its record high. Some forecasters are predicting a potential drop to as low as $40,000, 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 combines key valuation metrics, including the 200-week moving average and realized price, to rank Bitcoin's price on a historical percentile basis. According to the index, a price of $40,000 would be a '0.4 event,' falling in the 0.4th percentile of all daily closes, which is below any meaningful deviation across major anchors.
For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis. In contrast, the current price is around the 31.5th percentile, historically weak but within normal correction ranges. Check emphasizes that while there is no zero probability in markets, achieving a $40,000 Bitcoin price would be a near-unprecedented outcome.