Despite its recent 15% gain this month, Bitcoin's value is still 40% below its all-time high, leaving some industry experts unconvinced that it has escaped the bear market that began in October. Some forecasters are even predicting a potential drop to as low as $40,000, which would be a 70% decline from its record high. 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, 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 an extremely rare event. For perspective, Check notes that 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, which is historically weak but within normal correction ranges. Check emphasizes that while there is no zero probability in markets, a drop to $40,000 would be a nearly unprecedented outcome.