Despite Bitcoin's recent gains of nearly 15% this month, with a current price of $79,854.07, some industry experts remain unconvinced that the largest cryptocurrency has escaped the bear market that began in October, given it still lags 40% behind its record high. Some forecasters, including analyst James Check, predict a potential drop to as low as $40,000, which would represent a 70% decline from its all-time high.
Check considers such a move unlikely, stating it would be statistically remarkable. Historically, after surpassing $126,000 in October, Bitcoin plummeted over 50% to around $60,000 in February before stabilizing, and was trading near $78,000 on Friday.
Check scrutinizes bearish predictions, referencing the Bitcoin Mean Reversion Index, which averages key valuation metrics like the 200-week moving average and realized price, ranking Bitcoin's price on a historical percentile basis. At $40,000, Bitcoin would register as a '0.4 event,' placing it in the 0.4th percentile of all daily closes, below any meaningful deviation.
Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, whereas the current price sits around the 31.5th percentile, historically weak but within normal correction ranges. Check acknowledges that while no outcome has zero probability in markets, a $40,000 price would be a nearly unprecedented outcome.