Galaxy Digital Surges 9.6% on Intraday Rally: What's Fueling the Momentum?

Summary
• Galaxy Digital (GLXY) trades at $30.90, up 9.6% from its previous close of $28.19
• Intraday range spans $28.92 to $31.16, with turnover hitting 6.77 million shares
• Dynamic PE ratio of 37.7x and 52-week high of $45.92 highlight valuation tension

Galaxy Digital’s explosive 9.6% intraday rally has ignited market attention, defying a weak Diversified Financials sector. With turnover surging to 3.59% of float and options volatility spiking to 613%, the move suggests a mix of technical momentum and speculative positioning. Traders are now dissecting whether this breakout stems from short-term catalysts or signals a broader re-rating of the digital asset space.

Options Volatility and Technical Breakouts Drive GLXY’s Surge
Galaxy Digital’s 9.6% intraday jump is driven by a confluence of technical and options-driven factors. The stock has pierced above its 30-day moving average of $25.47 and is trading near its 52-week high of $45.92, triggering algorithmic buying and breakout momentum. Options data reveals extreme implied volatility (IV) spikes, with the GLXY20260123C28.5 call option trading at 133.64% IV and 9.8% leverage ratio. This suggests aggressive speculative positioning ahead of the January 23 expiration, as traders bet on a continuation of the upward trend. The RSI of 66.7 and MACD crossover above the signal line further validate the bullish momentum.

Options and ETF Strategy: Capitalizing on GLXY’s Volatility
• Technical Indicators:
- 30D MA: $25.47 (below current price)
- 100D MA: $29.88 (near term support)
- RSI: 66.7 (bullish momentum)
- MACD: 0.555 (positive divergence)
- Bollinger Bands: $21.54–$27.72 (current price above upper band)

Trading Setup: GLXY’s price action suggests a continuation pattern above its 30D MA and 52-week low. Key resistance lies at $31.16 (intraday high) and $33.50 (psychological level). Short-term bulls should target $33.50 with a stop-loss below $28.92 (intraday low).

Top Options:
• GLXY20260123P28
- Type: Put
- Strike: $28
- Expiry: 2026-01-23
- IV: 222.36% (extreme volatility)
- Leverage Ratio: 59.34% (high)
- Delta: -0.324 (moderate sensitivity)
- Theta: -0.156 (rapid time decay)
- Gamma: 0.033 (price sensitivity to movement)
- Turnover: 832 (liquid)
- Why: This put option offers high leverage for a bearish reversal if GLXY fails to hold $31.16. The 222% IV implies significant downside expectation.

• GLXY20260123C28.5
- Type: Call
- Strike: $28.5
- Expiry: 2026-01-23
- IV: 133.64% (moderate)
- Leverage Ratio: 9.8% (moderate)
- Delta: 0.687 (strong directional bias)
- Theta: -0.207 (aggressive time decay)
- Gamma: 0.055 (high sensitivity to price swings)
- Turnover: 343,953 (extremely liquid)
- Why: This call option is ideal for aggressive bulls. With 9.8% leverage and 133% IV, it offers outsized returns if GLXY breaks above $31.16. A 5% upside to $32.45 would yield a 37% payoff (max(0, 32.45-28.5) = $3.95).

Action: Aggressive bulls should prioritize GLXY20260123C28.5 into a breakout above $31.16. Cautious traders may short GLXY20260123P28 if the stock fails to hold $28.92.

Backtest Galaxy Digital Stock Performance
The backtest of GLXY's performance after an intraday surge of 10% in 2022 shows favorable short-to-medium-term gains, highlighting the ETF's potential for positive returns following significant market moves. 1. Frequency and Win Rates: The event occurred 88 times over the backtested period, with a 3-day win rate of 46.59%, a 10-day win rate of 54.55%, and a 30-day win rate of 56.82%. This indicates a higher probability of positive returns in the immediate aftermath of the surge event.2. Returns: The average 3-day return following the event was 0.95%, with a maximum return of 15.27% on day 59. The 10-day return was higher at 4.11%, with a maximum return of 18.23% on day 93. The 30-day return was 9.76%, with a maximum return of 21.46% on day 119. These returns suggest that GLXY can capitalize on the momentum generated by the intraday surge.3. Max Return Days: The maximum return days for the 3-day, 10-day, and 30-day periods were later than the initial surge day, indicating that the best returns were experienced beyond the immediate aftermath of the surge. This implies that investors may want to consider holding their position for a few days after the event to capture the full potential of the gains.In conclusion, GLXY has shown favorable performance following a 10% intraday surge in 2022, with significant gains observed in the short to medium term. This backs the strategy of leveraging such events for potential profit, keeping in mind the varying win rates and return patterns across different time frames.

GLXY’s Volatility: A High-Stakes Game for January 23
Galaxy Digital’s 9.6% surge is a high-stakes technical and options-driven event, with the January 23 expiration date acting as a critical catalyst. The stock’s proximity to its 52-week high and extreme options volatility suggest a continuation of momentum is likely, but caution is warranted given the overbought RSI and stretched Bollinger Bands. Traders should monitor the $31.16 intraday high as a key level—break above it validates the bullish case, while a breakdown to $28.92 could trigger a reversal. Meanwhile, sector leader JPMorgan Chase (JPM) is up 1.09%, signaling broader financial sector strength. Investors should watch for a $33.50 breakout or a pullback to $25.47 (30D MA) as the next major inflection points.