Critical Metals (CRML) Plummets 24% Amid Sector Turmoil: What’s Fueling the Selloff?

Summary
• Critical Metals (CRML) trades at $22.79, down 23.96% from its previous close of $29.97
• Intraday range spans $22.295 to $28.00, reflecting volatile trading
• Sector peers like MP Materials (MP) also decline, with MP down 10.29%
• Recent off-take agreements with REalloys and Ucore Rare Metals failed to sustain momentum

Today’s dramatic selloff in Critical Metals underscores a broader sector-wide correction driven by geopolitical tensions and regulatory headwinds. Despite recent off-take agreements and JPMorgan’s trillion-dollar investment pledge, CRML’s sharp decline highlights investor caution amid China’s tightening rare earth export controls and escalating U.S.-China trade frictions.

Geopolitical Tensions and Regulatory Overhangs Trigger Sell-Off
Critical Metals’ 24% intraday drop is a direct consequence of China’s expanded rare earth export restrictions, announced on October 8, 2025. The Chinese Ministry of Commerce added five rare earth elements (holmium, erbium, thulium, europium, ytterbium) to its export control list, requiring licenses for technologies used in mining, processing, and magnet manufacturing. This move, coupled with Trump’s looming tariffs and Beijing’s extraterritorial curbs, has rattled investor sentiment. While CRML’s off-take agreements with REalloys and Ucore Rare Metals signal long-term demand visibility, the immediate market reaction reflects fears of supply chain disruptions and regulatory hurdles. Additionally, JPMorgan’s $1.5 trillion initiative, though supportive of the sector, has yet to offset short-term volatility.

Rare Earth Sector Under Pressure as MP Materials Leads Decline
The rare earth sector is broadly under pressure, with MP Materials (MP) down 10.29% intraday, reflecting shared vulnerabilities to China’s export controls. CRML’s 24% drop aligns with sector-wide jitters, as investors reassess exposure to geopolitical risks. While CRML’s Greenland-based Tanbreez project offers strategic advantages, the sector’s reliance on U.S.-China trade dynamics remains a critical overhang. MP’s decline underscores the sector’s sensitivity to regulatory shifts, particularly as China’s new rules target both raw materials and downstream technologies.

Options and Technicals: Navigating Volatility in a Turbulent Sector
• MACD: 3.95 (above signal line 1.90), RSI: 91.16 (overbought), Bollinger Bands: Upper $22.91, Middle $10.32, Lower -$2.26
• 200D MA: $4.40 (far below current price), 30D MA: $8.91

Technical indicators suggest CRML is in a short-term bullish trend but faces overbought conditions. The RSI at 91.16 signals potential exhaustion, while the MACD histogram (2.05) hints at waning momentum. Key support levels at $22.295 (intraday low) and $20 (lower Bollinger Band) are critical to watch. Aggressive short-term traders may consider bearish options given the overbought RSI and sector-wide headwinds.

Top Options Contracts:
• CRML20251121P22.5 (Put):
- Strike: $22.50, Expiration: 2025-11-21
- IV: 203.00% (extreme volatility), Delta: -0.375 (moderate sensitivity), Theta: -0.0578 (moderate time decay), Gamma: 0.0260 (responsive to price swings), Turnover: $221,410
- Payoff (5% downside): $0.29 per share (max profit if CRML drops below $22.50).
- Why it stands out: High implied volatility and moderate delta make this put ideal for capitalizing on a near-term pullback.
• CRML20251219P25 (Put):
- Strike: $25.00, Expiration: 2025-12-19
- IV: 203.19% (extreme volatility), Delta: -0.379 (moderate sensitivity), Theta: -0.0447 (lower time decay), Gamma: 0.0198 (modest responsiveness), Turnover: $939,238
- Payoff (5% downside): $2.21 per share (strong profit potential if CRML falls below $25).
- Why it stands out: High liquidity and IV, combined with a longer expiration, offer flexibility for a deeper correction.

Action Insight: Aggressive bears may consider CRML20251121P22.5 for a near-term short, while CRML20251219P25 suits those anticipating a broader selloff. Monitor the $22.295 support level and sector news for directional clues.

Backtest Critical Metals Stock Performance
It looks like the automatic extraction step that was supposed to scan the price file and pick out every session where CRML dropped ≥ 24 % from the day’s open to the intraday low returned an internal error.To keep us moving forward there are a few ways we can proceed:1. Retry the extraction – I can run the event-date extraction again with a slightly different rule specification (sometimes this clears the error).2. Supply the key dates manually (if you already know them) – You give me the list of dates and I can jump straight to the event-impact back-test.3. Use a simplified proxy rule — e.g. daily Close vs Open decline ≥ 24 % instead of intraday Low – This avoids the intraday low field and tends to run more reliably. – It may capture essentially the same extreme-selloff days but could miss some that rebounded intraday.Let me know which option you prefer (or if you have another idea) and we’ll proceed immediately.

Sector Volatility Intensifies: Position for a Pivotal Week
Critical Metals’ 24% drop underscores the sector’s vulnerability to geopolitical shifts and regulatory overhangs. While CRML’s Greenland assets and off-take agreements remain strategically compelling, near-term risks from China’s export controls and Trump’s tariff threats dominate sentiment. Investors should closely monitor MP Materials’ performance (-10.29% intraday) as a barometer for sector resilience. For CRML, key levels at $22.295 and $20 will determine whether the selloff is a buying opportunity or a deeper correction. Act now: Consider bearish options or short-term hedges if the $22.295 support breaks, but stay alert for a potential rebound if sector dynamics stabilize.