15 December 2020

MassMutual Bitcoin Purchase

The cryptocurrency market remained under pressure over the last week and so as Bitcoin and other altcoins remained under selling pressure testing key support levels.

During the weekend, Bitcoin (BTC) and Ethereum (ETH) registered a relief rally. We can say thanks to the rising institutional participation as these two cryptocurrencies continue to attract institutional players.

During the weekend, Bitcoin (BTC) quickly regained the lost ground after dropping below $18,000 levels last Friday, December 11. The recovery rally came amid news of institutional money inflow into Bitcoin.

BTC Adoption Spikes with MassMutual Bitcoin Purchase of $100MM

The Bitcoin (BTC) price recovery happened soon after news arrived that insurance giant MassMutual has purchased $100 million worth of BTC via NYDIG. On Saturday, December 12, business intelligence firm MicroStrategy announced that it has completed the offering for its $650 million worth of convertible notes and intends to use all these proceeds to invest in Bitcoin.

Certainly, the continuous surge in institutional money inflow into Bitcoin has boosted investor confidence. JPMorgan also called MassMutual’s Bitcoin investment crucial for wider institutional adoption of the cryptocurrency.

In a note to clients, JPMorgan analysts noted: MassMutual Bitcoin purchase represents another milestone in the BTC adoption by institutional investors. One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutuals example.”

JPMorgan notes that if some of the world’s biggest insurance funds and pension funds allocate 1% of their assets to Bitcoin, it can result in a net inflow of $600 billion.

Although Bitcoin has regained its levels above $19,000, it still faces key resistance at $19,500 levels. Probably this could be the final attempt for Bitcoin in 2020 to break past its yearly-high and move above $20,000 levels.

Interestingly, the latest Bitcoin price rally comes at the time when the global yield-debt reaches record levels. The volume for the negative-yielding debt has reached an all-time high of $18.4 trillion. Moreover, the BTC price surge comes despite the Dollar’s recovery.

Holger Zschaepitz, a market analyst at Welt, notes that the surge in the institutional participation in Bitcoin (BTC) is the outcome of the growth in the negative-yield debt. The Welt analyst wrote:

Bitcoin rallies >$19k again as institutional interest grows as the global volume of negative-yielding debt hit fresh ATH of $18.4tn. Life insurance giant MassMutual has announced it has already invested $100mn in Bitcoin for its general fund.”

 

Bitcoin Negative Yield
Bitcoin Negative Yield. Image Courtesy: Twitter/Holger Zschaepitz

Image Courtesy: Twitter/Holger Zschaepitz

On the other hand, on-chain data from Santiment suggest that the total number of addresses holding 10,000 to 100,000 BTC has tanked significantly over the last month. It goes to suggest that Bitcoin whales have been on a selling spree and booking profits.

Etheruem (ETH) Attracts New Institutional Money

After testing support at $540 levels twice during the last week, the Ethereum (ETH) price bounced back during the weekend. Although ETH approached $600 levels, it couldn’t move past it and is facing strong resistance.

Ethereum Technical Analysis
Ethereum Technical Analysis.Courtesy of Trading View.com

Although $600 remains as the immediate resistance, the key resistance above will be around $650 levels. Similarly, $560 stands as the key support for the ETH price after which the next support is at $520.

Just like Bitcoin (BTC), Ethereum (ETH) also remains on the radar of institutional players. Last week, the Grayscale Ethereum Trust (ETHE) purchased $75 million worth of ETH as per the report submitted to the SEC.

Ripple’s XRP also continues to remain under major selling pressure. XRP has lost 20% over the last week as has slipped below $0.50 as of writing this article.

XRP Technical Analysis
XRP Technical Analysis. Courtesy of TradingView.com

The chart shows that XRP is under intense overhead pressure and holds the risk of dropping all the way to $0.40 if it closed below 200 SMA of $0.50.

Cardano to Bring DeFi Functionality to the Network, ADA Breakout Could Lead to New Yearly Highs

Cardano’s ADA which is currently the 8th most valued cryptocurrency in the market is showing an interesting movement in recent times. Firstly, talking about new developments, Cardano’s blockchain is coming up with a new protocol update called Goguen by the end of February 2021.

However, its recent partnership with BondlyFinance suggests that Cardano will soon introduce decentralized finance (DeFi) to its blockchain platform. Cardano’s parent IOHK Media made the official announcement today.

From its multi-month high of $0.19, Cardano’s ADA seems to be currently changing hands at $0.15. As per the below technical chart, ADA seems to be in a consolidation phase at this stage.

A breakthrough in any direction outside the triangle will decide the price momentum. In case of bearish momentum, ADA can possibly retest $0.138 levels before recovery.

Cardano Technical Analysis
Cardano Technical Analysis. Courtesy of TradingView.com
Close Bitnami banner
Bitnami