Despite Bitcoin's recent 15% gain this month, some experts remain skeptical that it has escaped the bear market that began in October, given it still lags 40% behind its record high. Some forecasters predict a potential drop to $40,000, a 70% decline from its all-time peak. Analyst James Check considers such a move statistically extraordinary, though not impossible.
Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank Bitcoin's price historically. A price of $40,000 would place Bitcoin in the 0.4th percentile of all daily closes, an outcome Check describes as 'near-unprecedented' and equivalent to Bitcoin trading at $2 in 2011 on a relative basis. Currently, Bitcoin's price is at the 31.5th percentile, weak but within normal correction ranges.