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 it still lags 40% behind its record high. Some forecasters predict a potential drop to $40,000, a 70% decline from its all-time high. Analyst James Check considers such a move unlikely, describing it as statistically extraordinary, though not impossible.
Check references the Bitcoin Mean Reversion Index, which combines key valuation metrics to rank bitcoin's price historically. A $40,000 price point would place bitcoin in the 0.4th percentile of all daily closes, an extremely low ranking.
This would be equivalent to bitcoin trading at under $2 in 2011, relative to its price at the time. Currently, bitcoin's price is around the 31.5th percentile, which is historically weak but within normal correction ranges.
Check notes that while no market event has zero probability, a $40,000 price point would be a nearly unprecedented outcome.