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, given its current price 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.
However, analyst James Check considers such a move highly unlikely, describing it as statistically extraordinary. Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank the cryptocurrency's price on a historical percentile basis. At $40,000, Bitcoin would register as a '0.4 event,' placing it in the 0.4th percentile of all daily closes, below any meaningful deviation across major anchors. This would be equivalent 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, a drop to $40,000 would be a near-unprecedented outcome.