The bond yields across most developed economies have dropped sharply since the central banks unleashed a slew of measures to counter the economic crisis caused by the COVID-19 pandemic.
This could pose a challenge to the institutional investors who rely on the traditional 60/40 portfolio allocation between equities and fixed income instruments.
This week Fidelity Digital Assets also released its Bitcoin Investment Thesis report which details how a portfolio with a Bitcoin (BTC) allocation as low as one to three percent can beat the traditional allocation on various time scales.
Daily cryptocurrency market performance. Source: Coin360
The report also highlights how Bitcoin’s market capitalization could soar, even if it manages to attract a small portion of the alternative investment market which is currently valued at $13.4 trillion or the bond market which is worth over $50.3 trillion.
As of today, about 13 public companies have allocated nearly $6.8 billion in Bitcoin investments this year, according to data from Coin98 Analytics. Although the total amount invested by the companies is only about 3.2% of the current market capitalization of Bitcoin, the encouraging sign is that the investments have been rising consistently.
If this trend continues and more institutional-sized investors enter the crypto space, Bitcoin price could rise quickly.
Let’s analyze the top-10 cryptocurrencies to find out what the dominant trend is in the markets.
Bitcoin (BTC) broke above the $11,500 resistance and rallied to $11,719 on Oct. 12 but the bulls could not sustain the breakout. This shows that the higher levels are attracting selling by the short-term traders.
BTC/USD daily chart. Source: TradingView
The BTC/USD pair is correcting for the past two days but the positive thing is that the bulls have managed to keep the pair above $11,178.
The upsloping 20-day exponential moving average ($10,999) and the relative strength index above 60 suggests that bulls have the upper hand.
If buyers can push and sustain the price above 11,560, the pair could pick up momentum and resume its uptrend. The first target on the upside is $12,048 and if this level is scaled, the up-move may reach $12,460.
This bullish view will be invalidated if the pair weakens further from the current levels and breaks below the 20-day EMA. Such a move will suggest that the momentum has weakened.
The bears are defending the $395 resistance to keep Ether (ETH) range-bound between $395–$308. However, the gradually rising 20-day EMA ($363) and the RSI in the positive territory suggests a minor advantage to the bulls.
ETH/USD daily chart. Source: TradingView
If the bulls buy the dips to the moving averages, the ETH/USD pair may make one more attempt to rise above $395. If they succeed, the pair could start a rally that may reach the recent highs at $488.134.
Contrary to this assumption, if the bears sink the price below the moving averages, the pair could drop to the uptrend line. If the pair rebounds off this support, the bulls will make one more attempt to drive the price above $395.
In contrast, if the price slips below the uptrend line, it could keep the pair range-bound for a few more days.
The bulls could not thrust XRP above $0.26, hence, the inverse head and shoulders pattern did not complete. The moving averages have flattened out and the RSI has dropped to the midpoint, which suggests a balance between supply and demand.
XRP/USD daily chart. Source: TradingView
If the bears sink and sustain the price below the moving averages, the altcoin could consolidate for a few more days.
Conversely, if the XRP/USD pair rebounds off the 20-day EMA ($0.248), the bulls will make one more attempt to push the price above the overhead resistance.
If they manage to close (UTC time) the pair above $0.26, the inverse head and shoulders pattern will complete. This could start a rally that could climb up to $0.303746.
The failure of the bears to sink Bitcoin Cash (BCH) back below the 20-day EMA ($234) on Oct. 12 showed a lack of selling pressure at lower levels. Traders viewed this as a buying opportunity and propelled the price above the overhead resistance at $242 on Oct. 13.
BCH/USD daily chart. Source: TradingView
The moving averages are about to complete a bullish crossover and the RSI has risen above 68, which suggests that the bulls are in control. They will now try to push the BCH/USD pair to $280 and above it to $300.
However, the bears are unlikely to give up easily. They will make one more attempt to drag the price back below $242 and the 20-day EMA. If they can pull it off, it will indicate that the current breakout was a bull trap.
Binance Coin (BNB) soared above the overhead resistance on Oct. 12 but the bulls could not build upon the momentum and that resulted in the formation of a doji candlestick pattern on Oct. 13.
This suggests that the altcoin is taking a break as the bulls and the bears are uncertain about the next directional move.
BNB/USD daily chart. Source: TradingView
However, the upsloping moving averages and the RSI above 64 suggest that the bulls are in command. If the bears fail to sink the price below $29.5646, the bulls will again try to drive the price to $33.3888.
Contrary to this assumption, if the bears sink the price below the 20-day EMA ($28.30), it will suggest that the bullish momentum has weakened and a correction to the 50-day simple moving average ($26.07) could be on the cards.
The bears are mounting a stiff resistance at the 50-day SMA ($11.38) for the past two days but the positive thing is that the bulls have not allowed Chainlink (LINK) to drop below the 20-day EMA ($10.32).
LINK/USD daily chart. Source: TradingView
The 20-day EMA has started to move up gradually and the RSI in the positive territory suggests that bulls have the upper hand.
If the bulls drive the price above the 50-day SMA, the LINK/USD pair could rally to $13.28 and if this resistance also gets taken out, the up-move can reach $18.
Conversely, if the pair turns down from the current levels and plummets below the 20-day EMA, it will indicate weakness.
Polkadot (DOT) had been clinging to the 20-day EMA ($4.25) for the past few days but the bears are currently attempting to resolve this indecision to the downside. The flat 20-day EMA and the RSI at the midpoint suggests a balance between supply and demand.
DOT/USD daily chart. Source: TradingView
However, if the bears can sink the price below $4, the DOT/USD pair could retest the critical support at $3.5321.
Conversely, if the pair rebounds off $4, the bulls will take another aim at the overhead resistance at $4.6112. If the buyers manage to sustain the price above this level, a rally to $5.5899 is possible.
Cardano (ADA) has been facing resistance at the neckline of the possible inverse head and shoulders pattern for the past four days. The failure to break above the neckline has attracted selling and the bears will now try to sink the altcoin back below $0.104044.
ADA/USD daily chart. Source: TradingView
If the ADA/USD pair drops below the 20-day EMA ($0.100), it will signal that bears are shorting on rallies. They will then try to pull the price down to the right shoulder at $0.090.
However, the moving averages have completed a bullish crossover and the RSI is in the positive territory, which suggests that bulls have the upper hand. If the pair rebounds off the 20-day EMA, the bulls will again try to push the price above the neckline.
If they succeed, it will complete the reversal set up and start a new uptrend that may reach $0.128 and then $0.1445.
The bulls are aggressively defending the $51–$52.36 resistance zone but they have not been able to sink Litecoin (LTC) below the immediate support at the 20-day EMA ($47.98).
LTC/USD daily chart. Source: TradingView
This suggests that the bulls are not closing their positions in a hurry. The moving averages on the verge of a bullish crossover and the RSI in the positive territory also indicate an advantage to the bulls.
A tight consolidation near a resistance is usually resolved to the upside. In this case, if the bulls can thrust the price above the resistance zone, a new uptrend could begin that may reach $64.
This positive view will be invalidated if the bears sink the LTC/USD pair below the 20-day EMA.
Bitcoin SV (BSV) has been trading just above the 20-day EMA ($166) for the past two days with the bears trying to break the support and bulls attempting to defend it. The indicators are indecisive and are not giving a clear advantage to either the bulls or the bears.
BSV/USD daily chart. Source: TradingView
If the bears sink the price below the 20-day EMA, a drop to $155 is possible. A breakdown of this support may retest the critical support at $146.20.
If the BSV/USD pair rebounds off the current levels and rises above $180.63, it will complete an inverse head and shoulder pattern. Such a move could result in a rally to its pattern target of $218.29.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.