Despite Bitcoin's recent 15% surge this month, some experts believe it has yet to escape the bear market that began in October, given its current price is still 40% below its record high. Some forecasters predict a drastic drop to as low as $40,000, a 70% decline from its all-time peak.
However, analyst James Check considers such a move highly improbable, describing it as statistically extraordinary. Check references the Bitcoin Mean Reversion Index, which measures key valuation metrics, including the 200-week moving average and realized price. According to this index, a price of $40,000 would be a '0.4 event,' placing it in the 0.4th percentile of all daily closes, significantly below any meaningful deviation.
Check notes that this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, emphasizing that while no outcome has zero probability, a drop to $40,000 would be nearly unprecedented.