- Bakkt stock surged following two insider share purchases in May, a signal worth paying attention to.
- Insider buying is widely regarded as a bullish indicator, since executives and directors have access to non-public information that outside investors don't.
- The stock is holding at a key long-term support level that has remained unbroken since 2014, suggesting strong downside resistance at current prices.
Bakkt stock price jumped by over 15% on Tuesday as investors cheered the ongoing insider transactions. BKKT jumped to $10, up modestly from the year-to-date low of $6.86. So, is this the start of a new bull run for the ICE-backed company?
Why the Bakkt Stock Price is Soaring
BKKT shares jumped after Michael Alfred, a top director for the company, continued his accumulation. He bought 365,000 shares on May 15 and added more on May 18, bringing his total holdings to 625,000.
Insider transactions are normally closely monitored because these directors and executives possess information that the rest of the market does not.
However, data shows that some of its insiders, including Joe Henderson and Marc D’annunzio, have sold a few shares in the past 12 months.
READ MORE: Zcash Price Cup & Handle, Elliot Wave Points to Gains Amid Winklevoss Twins Buying
Alfred’s accumulation occurred during a transition period for the company. It completed the acquisition of Distributed Technologies Research in April this year.
This buyout helped it to combine its regulated institutional-grade infrastructure with its AI-native engine and scalable compliance stack. It will make it a larger company in the stablecoin industry and bring with it the pan-US money transmission licenses, the New York BitLicense, and its European Virtual Asset Service Provider license.
It funded the acquisition by issuing 11.3 million shares and left the door open to issuing 725k more.
The most recent results showed that Bakkt generated over $243 million in revenue in the first quarter, well below the $1.06 billion it reported in the same period last year. It recorded a net loss of $11.7 million and ended the quarter with $66.8 million in net cash.
A key concern among investors is that it will continue dilution, which has pushed its outstanding shares to 28.18 million from about 1 million in 2021. This explains why its short interest has jumped to nearly 10% today.
BKKT Stock Price Technical Analysis
The weekly chart shows that the Bakkt stock price has bottomed at $7.80, a level where it failed to move below in April and November 2024, April and November last year, and March and April this year. This is a sign that bears are afraid to place trades below this price.
The stock has remained below all moving averages, a sign that bears remain in control for now. There are signs that it has formed a head-and-shoulders pattern, a common bearish continuation sign.
Therefore, the most likely have a bearish breakout in the coming weeks. This retreat will be confirmed if it drops below the key support level at $7.8o. Such a move will point to more downside, potentially to the psychological point at $5.
On the other hand, however, the stock may rebound now that $7.80 has become an important support level.
READ MORE: Circle Stock Set to Surge as Bond Yields Soar and Bullish C&H Pattern Forms
