Despite Bitcoin's recent 15% gain this month, reaching $78,226.51, some industry experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given it still lags 40% behind 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. According to analyst James Check, such a move, although not impossible, would be statistically remarkable.
Check cites the Bitcoin Mean Reversion Index, which combines key valuation metrics like the 200-week moving average and realized price, to argue that a $40,000 price point would be extremely unlikely, ranking in the 0.4th percentile of all daily closes. This would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, far below the current price, which sits around the 31.5th percentile, a historically weak but normal correction range. Check emphasizes that while no market event has zero probability, a $40,000 price point would be a nearly unprecedented outcome.