Despite Bitcoin's recent 15% gain this month, some industry experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given its current price is still 40% below its record high. Some forecasters predict a potential drop to as low as $40,000, a 70% decline from its all-time high. According to Bitcoin analyst James Check, such a move would be highly unlikely and statistically extraordinary.
Check references the Bitcoin Mean Reversion Index, which averages 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 meaningful deviation across major anchors. For perspective, Check notes this would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis. Currently, Bitcoin's price sits around the 31.5th percentile, which is historically weak but within normal correction ranges.
Check emphasizes that while no market event has a zero probability, a drop to $40,000 would be a near-unprecedented outcome.