Bitcoin plunging to $40,000 would be a “near‑unprecedented” statistical outlier, according to analyst James Check — even as some forecasters warn of deeper declines.
Bitcoin has rallied about 15% this month, trading around $77,400–$78,000 on Friday, but that bounce hasn’t convinced all market observers that the long bear that began in October is over. The coin still sits roughly 40% below its record high, and a few unnamed bearish forecasters have speculated it could fall as low as $40,000 — roughly a 70% drop from its all-time peak.
Check says such a rout is possible in theory but extremely unlikely in practice. He points to the Bitcoin Mean Reversion Index, a composite model that averages several valuation anchors — including the 200‑week moving average, realized price, a power‑law trend and multiple volume‑weighted average price measures — and ranks Bitcoin’s price on a historical percentile scale.
When Check runs the model with a $40,000 price, Bitcoin becomes a “0.4 event,” meaning that day’s close would sit at the 0.4th percentile of all historical daily closes — a level he describes as “below any meaningful deviation across all major anchors.” By his reckoning, that relative move would be comparable to Bitcoin trading below $2 in 2011. Today’s price, by contrast, registers around the 31.5th percentile: historically weak, but well within normal correction territory.
“There’s no zero probability in markets,” Check added, “but this would be a near‑unprecedented outcome.”
Background: After topping above $126,000 in October, Bitcoin fell more than 50% to roughly $60,000 in February before stabilizing near current levels. Check’s analysis suggests that while caution is warranted, a collapse to $40,000 would be an extreme statistical anomaly rather than the most likely path.
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