Despite Bitcoin's recent gains of almost 15% this month, reaching $77,247.34, 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 predict 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, though not impossible.
Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics like the 200-week moving average and realized price. When modeled at $40,000, Bitcoin's price falls into the 0.4th percentile of all daily closes, indicating a '0.4 event' that 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.
Currently, the 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, a drop to $40,000 would be a near-unprecedented outcome.