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 are even 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, though not impossible.
Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and volume-weighted average price measures, to rank Bitcoin's price historically. At $40,000, Bitcoin would register as a 0.4th percentile event, indicating an extremely rare occurrence. For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, emphasizing that the current price, while historically weak, remains within normal correction ranges.
Check acknowledges that while no market event has zero probability, a drop to $40,000 would be a nearly unprecedented outcome.