Despite Bitcoin's recent 15% gain this month, some experts remain skeptical that the cryptocurrency has overcome the bear market that began in October, given that it still lags 40% behind its record high. Some forecasters predict a potential decline to as low as $40,000, a 70% drop from its all-time peak. Bitcoin analyst James Check considers such a move unlikely, stating that while not impossible, it would be statistically remarkable.
Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank Bitcoin's price historically. At $40,000, Bitcoin would rank in the 0.4th percentile of all daily closes, an extremely low deviation.
Check notes that this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, and describes it as a 'near-unprecedented outcome'.