Despite Bitcoin's recent 15% gain this month, some industry experts remain unconvinced that the largest cryptocurrency has emerged from 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. Bitcoin analyst James Check considers such a move unlikely, stating it would be statistically extraordinary, although not impossible. Check references the Bitcoin Mean Reversion Index, which averages key valuation metrics, including the 200-week moving average and realized price.
Modeling a $40,000 price point, bitcoin falls into the 0.4th percentile of all daily closes, equivalent to trading below $2 in 2011 on a relative basis. Currently, the price sits around the 31.5th percentile, historically weak but within normal correction ranges.
Check notes that while there's no zero probability in markets, a $40,000 price would be a near-unprecedented outcome.