Robinhood Plummets 5.5% as Crypto Stakes Hang in Balance: Is This the Catalyst for a New Bull Run?

Summary
• Robinhood CEO Vlad Tenev warns Congress delay is stifling crypto innovation
• HOOD stock plunges 5.5% to $113.08, hitting intraday low of $112.92
• Analysts maintain 'Strong Buy' ratings with $156.24 average price target
• Options chain shows aggressive positioning with 20 contracts trading above 50% leverage ratios

Robinhood Markets (HOOD) is in freefall as regulatory uncertainty over crypto services sparks a sharp selloff. The stock has fallen 5.5% intraday to $113.08, trading below its 200-day moving average of $100.39. With the CEO sounding alarms over Congress’s crypto legislation gridlock and a volatile options chain signaling aggressive short-term bets, investors are left to decipher whether this is a buying opportunity or a warning shot. The stock’s 52-week range of $29.66–$153.86 suggests ample room for both sides of the argument.

Crypto Stakes and Regulatory Gridlock Spark Turbulence
Robinhood’s CEO Vlad Tenev has directly linked the stock’s selloff to stalled U.S. crypto legislation, warning that Congress’s delay is preventing the platform from offering staking and tokenized stocks to U.S. customers. The CLARITY Act, which aims to classify crypto as a commodity and restrict stablecoin rewards, has drawn fierce opposition from the banking sector. Tenev’s X post highlighted that four U.S. states already lack access to staking services, while tokenized stocks remain exclusive to EU users. This regulatory limbo has triggered a flight to safety, with options traders betting on both sides of the equation as the stock trades near its 52-week low.

Broker-Dealers Sector Splits as Schwab Gains Ground
While Robinhood tumbles, the broader Broker-Dealers sector shows mixed signals. Sector leader Charles Schwab (SCHW) is up 1.03% intraday, reflecting investor confidence in traditional brokerage models. Robinhood’s struggles highlight the sector’s divergence: Schwab’s GAAP profitability and established fintech infrastructure contrast with Robinhood’s reliance on crypto-driven innovation. The sector’s 1.03% gain underscores a shift toward conventional financial services amid regulatory uncertainty.

Aggressive Bets and ETFs: Navigating HOOD’s Volatility
• MACD: -1.60 (bullish divergence), Signal Line: -2.09, Histogram: 0.48 (positive momentum)
• RSI: 49.09 (neutral), Bollinger Bands: $112.68–$123.93 (key support/resistance)
• 200-day MA: $100.39 (below current price), 30-day MA: $122.02 (resistance ahead)

Robinhood’s technicals suggest a short-term bounce from the lower Bollinger Band ($112.68) but a bearish bias if the 200-day MA is breached. The Direxion Daily HOOD Bull 2X ETF (HODU) and Roundhill HOOD WeeklyPay ETF (HOOW) offer leveraged exposure, though HODU’s -11.18% drop today highlights the ETF’s volatility. For options, two contracts stand out:

• HOOD20260123C102 (Call)
- Strike: $102, Expiration: 2026-01-23, IV: 114.88% (high volatility), Leverage: 9.40%, Delta: 0.7275 (aggressive), Theta: -0.6845 (rapid time decay), Turnover: 2.4M
- Payoff (5% downside): $107.92 → $5.92 gain. This call thrives on a sharp rebound, leveraging high IV and moderate delta for directional bets.

• HOOD20260123P103 (Put)
- Strike: $103, Expiration: 2026-01-23, IV: 49.33% (moderate), Leverage: 186.37%, Delta: -0.1329 (defensive), Theta: -0.0321 (slow decay), Turnover: 248.8K
- Payoff (5% downside): $107.92 → $5.08 gain. This put offers high leverage with a low delta, ideal for hedging or capitalizing on a prolonged selloff.

Action: Aggressive bulls may consider HOOD20260123C102 into a bounce above $113.08, while defensive investors should eye HOOD20260123P103 if the 112.68 support breaks.

Backtest Robinhood Markets Stock Performance
The performance of HOOD (ETRADE Financial) after a -6% intraday plunge from 2022 to now has shown positive returns, with the 3-Day win rate at 56.88%, the 10-Day win rate at 62.17%, and the 30-Day win rate at 65.87%. The maximum return during the backtest period was 26.94%, with a maximum return day at 59.

Regulatory Crossroads: HOOD’s Next Move Could Define 2026
Robinhood’s 5.5% drop reflects the precarious balance between innovation and regulation in crypto. While the stock’s technicals hint at a potential rebound from key support, the broader narrative hinges on Congress passing the CLARITY Act. Analysts’ $156.24 average price target suggests conviction, but the 52-week low of $29.66 remains a looming risk. Investors should monitor the $112.68 support level and $123.93 resistance for directional clues. With Schwab (SCHW) up 1.03%, the sector’s shift toward traditional models could amplify HOOD’s volatility. Watch for a regulatory breakthrough or breakdown—either could ignite a new chapter for Robinhood.