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We use a 10-factor regime model to determine how much institutional investors should allocate to Bitcoin. These factors, ranging from on-chain analytics to price-based indicators, have a strong track record of signaling when investors should sidestep large drawdowns. This regime allocation reconfirms what our prior analysis already showed: dollar-cost averaging is a far inferior strategy to trading the cycles. Stepping aside when the going gets tough is exactly the point.
The alpha this process has generated across cycles has been substantial; it would have flagged the rotation out of the market as early as last November. That, in turn, would have left allocators positioned and ready to step back in the moment the regime model turns bullish again.
But after eight months of a bear market, something important is shifting. Is it time to step back in? The data is clear, and there's one key level every investor should mark on their screen and set an alert for.
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