Portfolio managers have long touted a 60/40 allocation between equities and fixed income to be the sweet spot for maximising returns by keeping the risk under control. However, a sharp drop in bond yields in the past few months could pose a stiff challenge to the portfolio managers to optimise returns using the same strategy.

Fidelity Digital Assets has argued in its report titled Bitcoin Investment Thesis that, even if portfolio managers allocate a mere one to three per cent of funds to Bitcoin, the performance of the portfolio increases. 

The institutional investors seem to have realised this as Bitcoin derivatives volume has been increasing in the past few months. Data from Arcane Research shows Bakkt Bitcoin exchange saw another record high delivery of Bitcoin in the October expiry, which suggests accumulation by the bulls.

The increased activity by institutional investors shows that they believe Bitcoin’s price is an attractive buy at the current levels. 

Do the technicals point to a rally in the next few days or does it show signs of tiring out?  Let’s do the Bitcoin price trend analysis of the weekly chart to find out.

Bitcoin price technical analysis: weekly chart

Bitcoin closed last week at $11,515.30, with a gain of 1.24 per cent. Both moving averages continue to slope up and the RSI is above 61, which suggests that bulls have the upper hand.

The buyers will now try to push the price above the $12,481.65 overhead resistance. If they succeed, the BTC/USD pair could resume its uptrend and attempt a rally to $14,000.

However, the bears are unlikely to give up easily. They are currently trying to stall the up-move at $11,750. If sellers can sink the pair below the 20-week EMA, it will indicate that the momentum has weakened and the next stop could be $10,000.

The Bitcoin price weekly analysis shows that the path of least resistance is to the upside but the bulls will have to overcome the $11,730–$12,500 resistance for momentum to pick up.

Let’s do the BTC price analysis of the daily chart to see if it has formed any bullish setups.

Bitcoin price technical analysis: daily chart

The daily chart shows that the price is stuck between $11,731.65 and $11,179.80 since October 12. Although it is difficult to predict the direction of the breakout from a range, the upsloping 20-day EMA and the RSI in the positive territory suggests that the bulls are in control.

Hence, the bulls are likely to step in and buy close to the 20-day EMA, which is just below the support of the range.

If the pair rebounds from this support, the bulls will again try to push the price above $11,731.65. If they succeed, the uptrend may resume.

Contrary to this assumption, if the bears sink the price below the 20-day EMA, a drop to the uptrend line is possible. A breakdown of this support could tilt the advantage in favour of the bears.

How to trade Bitcoin this week

The short-term traders who are long could reduce their risk by trailing the stop-loss higher to $11,000. However, swing traders with a slightly longer view may retain the stops at $10,700.

If the price rebounds sharply from the $11,179.80 support, aggressive bulls could consider buying with a close stop-loss. Traders should buy on the way up after the bounce rather than buy when the price is declining towards the support. 

Long positions could be avoided if the bears sink and sustain the price below the $11,179.80 support.

FURTHER READING: Bitcoin explained simply: everything you need to know

FURTHER READING: Bitcoin vs Bitcoin Cash vs Bitcoin SV: the ultimate guide