Despite Bitcoin's recent 15% gain this month, reaching $80,953.41, some experts remain unconvinced that the cryptocurrency has escaped the bear market that began in October, given it is still 40% below its record high. Some forecasters predict a potential drop to $40,000, a 70% decline from its all-time high. Bitcoin analyst James Check considers such a move unlikely, stating it would be statistically extraordinary, although not impossible.
Check referenced the Bitcoin Mean Reversion Index, which combines key valuation metrics, including the 200-week moving average and volume-weighted average price measures, to assess bitcoin's price on a historical percentile basis. Modeling a $40,000 price point, bitcoin falls into the 0.4th percentile of all daily closes, indicating a '0.4 event' that would be 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, the price sits around the 31.5th percentile, historically weak but within normal correction ranges. Check emphasized that while no market event has a zero probability, a $40,000 bitcoin price would be a near-unprecedented outcome.