CoreWeave Plunges 10%: What's Behind the Sudden Sell-Off?

Summary
• CoreWeave (CRWV) drops 10.34% intraday to $92.38, its lowest since July 2025
• All-stock $9B acquisition of Core Scientific sparks shareholder opposition and insider selling
• RSI at 28.47 signals oversold territory, but bearish momentum persists
• Options volatility surges, with 750,000+ contracts traded on the 9/12 expiration

CoreWeave’s 10% intraday collapse has sent shockwaves through the AI infrastructure sector. The stock’s freefall follows a combination of strategic missteps, insider selling, and growing skepticism about its $9 billion all-stock acquisition of Core Scientific. With technical indicators flashing red and options markets pricing in extreme volatility, investors are scrambling to assess whether this is a buying opportunity or a warning shot.

All-Stock Acquisition and Insider Selling Trigger Panic
CoreWeave’s 10.34% intraday drop stems from a perfect storm of strategic overreach and market skepticism. The company’s all-stock acquisition of Core Scientific—valued at $9 billion—has become a liability as its share price plummets. The deal’s structure leaves CoreWeave vulnerable to further declines, with Two Seas Capital, Core Scientific’s largest shareholder, now openly opposing the terms. Compounding the issue, Magnetar Financial’s $94.44 million insider stock sale has intensified doubts about management’s confidence. Meanwhile, CoreWeave’s Q2 earnings report revealed a 16% pre-market plunge after disclosing a disappointing operating income outlook, triggering a cascade of panic selling.

Options Volatility and Technicals Signal High-Risk, High-Reward Setup
• RSI: 28.47 (oversold)
• MACD: -7.47 (bearish), Signal Line: -8.16 (bullish crossover), Histogram: +0.69 (momentum shift)
• Bollinger Bands: Price at 73.30 (lower band), 106.85 (middle band)
• 30D MA: 109.78 (price below)
• Support/Resistance: 90.79–91.95 (key short-term floor)

CoreWeave’s technicals paint a mixed picture. While RSI suggests oversold conditions and MACD hints at a potential short-term bounce, the stock remains trapped near its 52-week low. The 90.79 support level is critical—breaking below could trigger a test of the $73.30 Bollinger Band floor. For options traders, the 9/12 expiration offers two standout contracts:

• CRWV20250912P87
- Type: Put
- Strike: $87
- Expiry: 9/12
- IV: 80.08% (high volatility)
- Leverage: 34.92% (aggressive)
- Delta: -0.3008 (moderate sensitivity)
- Theta: -0.0863 (moderate time decay)
- Gamma: 0.0271 (responsive to price swings)
- Turnover: 18,102 (liquid)
- Payoff at 5% downside: $0.76/share (max gain if price hits $87)
- This put offers a 35x leverage ratio with moderate delta, ideal for a 5% downside scenario. High gamma ensures it gains value as the stock drops.

• CRWV20250912P88.5
- Type: Put
- Strike: $88.5
- Expiry: 9/12
- IV: 81.59% (high volatility)
- Leverage: 28.04% (aggressive)
- Delta: -0.3467 (moderate sensitivity)
- Theta: -0.0838 (moderate time decay)
- Gamma: 0.0282 (responsive to price swings)
- Turnover: 13,241 (liquid)
- Payoff at 5% downside: $1.24/share (max gain if price hits $88.5)
- This contract balances leverage (28%) with high gamma (0.0282), making it ideal for a 5% drop. The 88.5 strike aligns with the 90.79 support level, offering a 1:1 risk-reward ratio if the stock breaks below $90.79.

Aggressive bulls may consider CRWV20250912C92 into a bounce above $92.38. The 92 call has 16.95% leverage and 0.5478 delta, but high theta (-0.4064) makes it risky for long-term holds.

Backtest CoreWeave Stock Performance

Short-Term Volatility Peaks—But Long-Term Risks Remain
CoreWeave’s 10% drop has created a volatile but potentially lucrative setup for short-term traders. The 90.79 support level and 9/12 options expiration are critical catalysts to watch. While technicals suggest a possible bounce, the acquisition’s structural risks and insider selling cast a long shadow. Investors should monitor Amazon’s -1.5% decline in the Data Processing sector as a barometer for broader sentiment. Watch for $90.79 breakdown or regulatory reaction to the Core Scientific deal—either could trigger a 15%+ move in either direction.