Despite Bitcoin's recent 15% gain this month, 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 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, although not impossible, 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, to rank Bitcoin's price historically.
At $40,000, Bitcoin would register as a 0.4th percentile event, indicating an extremely low probability. This would be equivalent to Bitcoin trading below $2 in 2011 on a relative basis, far below its current price, which sits around the 31.5th percentile, a historically weak but normal correction range. Check emphasizes that while no market event has zero probability, a drop to $40,000 would be a nearly unprecedented outcome.