Despite Bitcoin's recent 15% gain this month, some industry experts remain unconvinced that the largest 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 drop to as low as $40,000, a 70% decline from its all-time peak. Bitcoin analyst James Check considers such a move unlikely, stating it would be statistically remarkable. Check references the Bitcoin Mean Reversion Index, which combines multiple key valuation metrics, including the 200-week moving average and volume-weighted average price measures.
When modeled at $40,000, Bitcoin's price falls into the 0.4th percentile of all daily closes, indicating a '0.4 event' that is below any significant deviation from major anchors. For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis. In contrast, the current price is around the 31.5th percentile, historically weak but within normal correction ranges.
Check cautions that while there's no zero probability in markets, a decline to $40,000 would be a nearly unprecedented outcome.