Robinhood (HOOD) Plummets 3.18% Amid Fading Crypto Momentum – What’s Next for the Retail Trading Giant?

Summary
• Robinhood’s stock slumps 3.17% to $115.87, breaking below its 52-week low of $29.66
• Intraday range of $115.16–$119.88 highlights volatile session amid mixed analyst ratings
• November trading volumes drop 37% sparks bearish sentiment, yet Cathie Wood’s Ark Invest buys the dip
• Analysts remain bullish with $156.24 average price target, but valuation concerns linger

Robinhood’s 3.17% intraday decline has ignited a firestorm of speculation, with traders dissecting the impact of November’s 37% equity volume drop and crypto market volatility. Despite a $156.24 average price target from analysts, the stock’s 61.1x P/E ratio and 74.55x trailing P/E suggest stretched valuations. With Cathie Wood’s Ark Invest accumulating shares, the question remains: is this a buying opportunity or a warning sign?

November Trading Volumes Trigger Short-Term Pullback
Robinhood’s sharp intraday decline stems from a 37% drop in November equity trading volumes, 28% in options, and 12% in crypto, per recent reports. While year-over-year metrics remain positive, the monthly slowdown has rattled investors accustomed to the company’s 65% revenue growth in 2025. Analysts attribute the pullback to cyclical trading patterns and crypto market corrections, though Ark Invest’s $30M HOOD purchase signals conviction in the long-term narrative. The stock’s 3.17% drop reflects a recalibration of expectations ahead of earnings season.

Broker-Dealers Sector Mixed as Schwab Gains Ground
The Broker-Dealers sector remains fragmented, with Charles Schwab (SCHW) rising 1.45% on improved retail trading volumes. Robinhood’s 3.17% decline contrasts with Schwab’s resilience, highlighting divergent investor sentiment. While Schwab benefits from traditional brokerage growth, Robinhood’s reliance on crypto and prediction markets exposes it to sharper volatility. The sector’s 1.52689187% turnover rate underscores liquidity challenges, but Schwab’s 74.55 P/E ratio suggests more conservative valuation metrics.

Options Playbook: Puts on 1/23 Expiry Offer High Leverage for Bearish Bets
• RSI: 49.09 (neutral), MACD: -1.60 (bearish), 200D MA: $100.39 (below price)
• Bollinger Bands: $112.68–$123.93 (price near lower band), 30D MA: $122.02 (resistance)
• Support: $115.02–$115.50, Resistance: $114.61–$116.97

Robinhood’s technicals suggest a bearish bias, with RSI hovering near 50 and MACD signaling downward momentum. The 200-day MA at $100.39 offers a long-term floor, but near-term support at $115.02 is critical. Aggressive short-term traders may target the 1/23 expiry options, where high leverage ratios and moderate deltas align with the stock’s volatility.

• HOOD20260123P109 (Put, $109 strike, 1/23 expiry):
- IV: 49.41% (moderate), Leverage: 114.90%, Delta: -0.195, Theta: -0.0289, Gamma: 0.0306, Turnover: 447,345
- IV indicates balanced volatility, leverage amplifies potential gains, and gamma suggests sensitivity to price swings
- This contract offers 114.9x leverage on a $109 strike, ideal for a 5% downside scenario (ST = $110.08). Put payoff: max(0, $109 - $110.08) = $0.92 per share. High gamma ensures responsiveness to price dips.

• HOOD20260123P110 (Put, $110 strike, 1/23 expiry):
- IV: 48.97%, Leverage: 95.12%, Delta: -0.227, Theta: -0.0223, Gamma: 0.0338, Turnover: 100,799
- Slightly higher delta and gamma enhance directional exposure, while turnover confirms liquidity
- A 5% downside (ST = $110.08) yields max(0, $110 - $110.08) = $0.92 per share. The 95.1x leverage amplifies returns if the stock breaks below $110.

Aggressive bulls may consider HOOD20260123C110 into a bounce above $116.97, but bearish traders should prioritize the 1/23 puts for high-leverage short-term plays.

Backtest Robinhood Markets Stock Performance
The backtest of HOOD's performance after a -3% intraday plunge from 2022 to now shows favorable results. The 3-Day win rate is 56.88%, the 10-Day win rate is 62.17%, and the 30-Day win rate is 65.87%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest period was 26.94% over 30 days, suggesting that HOOD has the potential for significant gains following a dip.

Bullish Fundamentals vs. Bearish Technicals – What to Watch Now
Robinhood’s 3.17% intraday drop reflects cyclical trading concerns and crypto volatility, but its 65% revenue growth and $156.24 average price target suggest long-term resilience. Technicals favor a bearish near-term outlook, with support at $115.02 and resistance at $116.97. The Charles Schwab (SCHW) sector leader’s 1.45% gain highlights divergent momentum. Investors should monitor the 1/23 expiry options and watch for a breakdown below $115.02, which could trigger a retest of the 200-day MA at $100.39. For now, HOOD20260123P109 and HOOD20260123P110 offer high-leverage bearish exposure ahead of earnings.