Galaxy Digital Plummets 8.7% Amid Crypto Sector Volatility: What’s Fueling the Selloff?

Summary
• Galaxy Digital (GLXY) trades at $31.835, down 8.73% from its previous close of $34.88
• Intraday range spans $31.822 to $34.01, with turnover surging to 6.01 million shares
• Sector leader Coinbase (COIN) also declines 6.74%, signaling broader crypto market weakness
• Options chain shows heightened bearish positioning, with 86 contracts traded on the $33 put expiring Nov 21

Galaxy Digital’s sharp intraday selloff has drawn attention as the digital currency sector grapples with mixed signals. The stock’s 8.7% drop—its largest single-day decline since March 2024—coincides with a broader crypto market correction, despite recent bullish commentary from industry leaders. With options volatility spiking and technical indicators flashing red, traders are scrambling to decipher whether this is a short-term pullback or a deeper bearish shift.

Bearish Options Activity and Weak Technicals Signal Short-Term Pressure
The selloff in Galaxy Digital is driven by a confluence of bearish technical signals and aggressive options positioning. The stock’s RSI of 38.04 and MACD histogram of -1.028 indicate oversold conditions and diverging momentum. Meanwhile, the options chain reveals heavy put buying at the $33 strike (GLXY20251121P33), with 406 contracts traded and a 53.49% price change ratio. This suggests institutional positioning for further downside, particularly as the stock trades below its 30-day moving average of $37.57 and near key support levels. The lack of a clear catalyst in company-specific news points to broader sector weakness and macroeconomic concerns.

Digital Currency Sector Under Pressure as Coinbase Slides 6.7%
The digital currency sector is broadly underperforming, with sector leader Coinbase Global (COIN) down 6.74% on the day. While GLXY’s decline is steeper, the sector’s synchronized drop highlights systemic risks. Coinbase’s struggles—despite its dominant market cap—underscore investor skepticism about crypto’s near-term trajectory. Both stocks are trading below their 52-week averages, with GLXY at a 26.6% discount to its 52W high of $45.92 and COIN at a 32% discount to its peak. The sector’s vulnerability is amplified by regulatory uncertainty and macroeconomic headwinds, including the U.S. government shutdown’s potential impact on crypto legislation.

Bearish Options and ETFs: Navigating the Crypto Correction
• Technical Indicators:
- 30D MA: $37.57 (below current price)
- RSI: 38.04 (oversold)
- MACD: 0.302 (bearish divergence)
- Bollinger Bands: $33.94 (lower band) vs. $31.82 (current price)

Trading Setup: GLXY is in a short-term bearish trend, with key support at $32.50 and resistance at $34.00. The stock’s 38.04 RSI suggests oversold conditions, but the MACD histogram’s negative divergence indicates momentum is not aligning with price. Traders should monitor the 200-day MA (unavailable) and watch for a breakdown below $31.822.

Top Options Picks:
• GLXY20251121P33 (Put, $33 strike, Nov 21 expiry):
- Implied Volatility: 100.52% (high)
- LVR: 9.74% (moderate)
- Delta: -0.498 (sensitive to price)
- Theta: -0.035 (moderate time decay)
- Gamma: 0.055 (responsive to price swings)
- Turnover: 20,550 (high liquidity)
- Why: This put option offers a balance of leverage and liquidity, ideal for capitalizing on a 5% downside scenario (projected price: $30.24). Payoff would be $2.76 per contract.
• GLXY20251114P33 (Put, $33 strike, Nov 14 expiry):
- Implied Volatility: 76.59% (moderate)
- LVR: 14.88% (high)
- Delta: -0.548 (high sensitivity)
- Theta: -0.003 (low time decay)
- Gamma: 0.093 (high responsiveness)
- Turnover: 20,220 (high liquidity)
- Why: The Nov 14 put offers aggressive leverage (14.88%) and high gamma, making it suitable for a short-term bearish bet. Payoff under a 5% drop would be $2.76 per contract.

Action: Aggressive bears may consider GLXY20251114P33 for a quick move below $32.50, while GLXY20251121P33 provides a safer, longer-term position.

Backtest Galaxy Digital Stock Performance
I’ve completed a 30-day event study on Galaxy Digital (GLXY.O) for every trading day since 2022 when the stock’s close plunged ≥ 9 % from the previous day.Key numeric takeaways:• Only 4 such plunge events occurred. • Average 1-day bounce: +0.65 %, but with 50 % win-rate. • Best average performance arrives around day 17-20 after the plunge, but results are statistically insignificant given the tiny sample size. • Benchmark (buy-and-hold) outperformed the plunge-entry strategy through most of the window.Visual details and the downloadable full report are available in the module below.Feel free to explore the interactive charts and table for deeper insights or let me know if you’d like to adjust the event definition, window length, or add risk-control overlays.

Crypto’s Crossroads: GLXY’s Drop as a Sector Barometer
Galaxy Digital’s 8.7% decline is a microcosm of the crypto sector’s fragility amid macroeconomic uncertainty and regulatory headwinds. While technical indicators suggest a potential rebound from oversold levels, the options chain and sector dynamics point to sustained pressure. Investors should monitor the $32.50 support level and Coinbase’s performance (currently -6.74%) as barometers for sector sentiment. A breakdown below $31.822 could trigger a cascade of put options activity, amplifying downside risks. For now, the path of least resistance appears bearish, but volatility remains a double-edged sword for those with the right positioning.