The recent surge in Bitcoin's value, with a nearly 15% increase this month, has not convinced all industry experts that the cryptocurrency has escaped the bear market that began in October, given that it still remains 40% below its record high. Some forecasters are predicting a potential drop to as low as $40,000, which would represent a 70% decline from its all-time high. According to Bitcoin analyst James Check, such a move, although not impossible, would be statistically remarkable.
Check references the Bitcoin Mean Reversion Index, which combines multiple key metrics, including the 200-week moving average and realized price, to rank Bitcoin's price historically. At $40,000, Bitcoin would be at the 0.4th percentile of all daily closes, indicating a highly unusual event. This would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis.
Currently, the price is around the 31.5th percentile, which is historically weak but within normal correction ranges. Check notes that while no event has a zero probability in markets, a drop to $40,000 would be a nearly unprecedented outcome.