The price of Bitcoin is dropping 3.5% at $17,610 in early cryptocurrency trading activity, making this the coin’s fourth red day in the past five sessions despite news that another big institutional player has just acquired a sizable amount of the crypto asset.
Just yesterday, 169-year old insurance company Massachusetts Mutual Life Insurance – also known as Mass Mutual – announced that it has acquired a total of $100 million in Bitcoin (BTC) as part of a transaction facilitated by NYDIG – a firm that provides technological solutions to the financial industry.
NYDIG’s Chief Executive Robert Gutmann qualified the transaction as an “incredible moment in the history of both Bitcoin and the insurance industry” although the markets did not respond positively as the price of the cryptocurrency kept dropping despite this seemingly positive development.
This investment represents roughly 0.04% of MassMutual’s investment portfolio, while a spokeswoman for the firm told Bloomberg that they see this stake as a “first step”, emphasizing that the company is also willing to explore “future opportunities” in the cryptocurrency landscape.
MassMutual is joining a growing list of institutional investors who have jumped on board of Bitcoin’s ship lately, including billionaire investor Stanley Druckenmiller and Mexican tycoon Ricardo Salinas Pliego, both of which announced that they had incorporated Bitcoin to their portfolios.
Aside from this, digital payments companies Square and Paypal have also started to recognize the importance of Bitcoin in the global payments landscape, as the former acquired $50 million recently as a hedge for its cash reserves while the latter launched a feature to buy cryptocurrencies within its 325-million user platform.
The price of Bitcoin, however, has been dropping steadily since the cryptocurrency jumped to all-time highs on 1 December, posting an intraday high of $19,918 to then settle at $18,771 that same day.
What’s next for Bitcoin (BTC)?
Bitcoin’s daily chart shows that the coin’s latest all-time high came along with a negative divergence in the RSI, which indicates that the momentum was already fading for the cryptocurrency despite its furious surge.
In fact, the MACD had already sent a sell signal since 26 November and did not move above the signal line on 1 December – the day in which Bitcoin posted a brand-new all-time high – which reinforced the bearish outlook for the digital coin.
Meanwhile, the hourly chart above shows how the price action broke an intraday resistance on 8 December when the price moved below the $18,900 level, while also stepping out of the sideways consolidation pattern shown in the chart as well.
Despite briefly retesting the low end of this rectangle, bulls seem to have capitulated today, which resulted in this morning’s meltdown, as the price heads to its 9 December intraday lows.
This level seems to be serving as support right now and it is definitely the one to watch to anticipate where BTC might be headed next.
A drop below this level could end up pushing BTC to the low 16,000s or, if the price bounces off this threshold, it could be the start of a short-term bull run fueled by a traditionally bullish double bottom formation.