Galaxy Digital Surges 10.7%: What's Fueling the Volatility?

Summary
• Galaxy Digital (GLXY) rockets 10.69% to $24.75, piercing the $24.865 intraday high
• RSI plummets to 20.27, signaling oversold conditions amid a short-term bearish trend
• Options chain erupts with 47 contracts traded at the $23.5 strike, hinting at speculative fervor
• Turnover surges to 4.08 million shares, outpacing the 2.16% turnover rate threshold

Galaxy Digital’s meteoric 10.7% rally has ignited a firestorm in the options market, with technical indicators and order flow painting a complex picture of exhaustion and potential reversal. The stock’s violent break above the $24.46–$24.61 support/resistance zone, coupled with a 52-week low of $17.40, suggests a critical inflection point. Traders are now parsing whether this surge reflects a short-covering bounce or a catalyst-driven breakout.

Oversold Rebound Amid Deteriorating Momentum
The 10.7% intraday surge in Galaxy Digital appears to stem from a classic oversold rebound, as the RSI (20.27) and MACD (-1.49) signal extreme bearish exhaustion. Price action confirms this: the stock pierced the lower Bollinger Band ($20.48) and rebounded violently, closing near the $24.865 high. The 2.16% turnover rate—well above the 1.5% average—suggests aggressive short-covering and retail-driven buying. However, the 30D MA at $25.24 and 100D MA at $29.93 remain formidable hurdles, indicating this could be a temporary bounce rather than a sustained reversal.

Asset Management Sector Lags as GLXY Defies Trend
High-Leverage Call Options Target $25.26 Breakout
• Technical Snapshot:
- 30D MA: $25.24 (below current price)
- 100D MA: $29.93 (major resistance)
- RSI: 20.27 (oversold)
- Bollinger Bands: $20.48 (lower) to $30.05 (upper)
- MACD: -1.49 (bearish) vs. Signal Line: -1.43 (narrowing divergence)

Top Options Picks:
• GLXY20260109C22
- Type: Call
- Strike: $22
- Expiry: 2026-01-09
- IV: 86.55% (high volatility)
- Leverage Ratio: 9.54% (high)
- Delta: 0.84 (high sensitivity)
- Theta: -0.14 (rapid time decay)
- Gamma: 0.075 (strong price sensitivity)
- Turnover: 12,660 (liquid)
- Payoff at 5% Upside ($26): $4.00 (max(0, 26-22))
- Why: High leverage and liquidity make this ideal for a $25.26 breakout attempt.

• GLXY20260109C23.5
- Type: Call
- Strike: $23.5
- Expiry: 2026-01-09
- IV: 67.96% (moderate)
- Leverage Ratio: 13.94% (extreme)
- Delta: 0.72 (moderate sensitivity)
- Theta: -0.14 (aggressive decay)
- Gamma: 0.133 (high gamma)
- Turnover: 6,830 (liquid)
- Payoff at 5% Upside ($26): $2.50 (max(0, 26-23.5))
- Why: Combines extreme leverage with high gamma for a sharp move above $24.865.

Action: Aggressive bulls should target the GLXY20260109C22 into a break above $24.865, with a stop at $24.46. The $25.26 middle Bollinger Band is a critical psychological level; a close above it could trigger a 15%+ rally into the 100D MA.

Backtest Galaxy Digital Stock Performance
The GLXY ETF experienced a notable intraday surge of 11% at some point during 2022, and we've backtested its performance following this event. The results show a generally positive trend, with the 3-day win rate at 48.81%, the 10-day win rate at 57.14%, and the 30-day win rate at 59.52%. The maximum return observed was 15.27% over 30 days, indicating that while there was some volatility, the ETF tended to recover and even exceed its pre-event levels in the short term.

Break $24.865 to Validate Bullish Case
Galaxy Digital’s 10.7% surge is a high-stakes test of the $24.865 intraday high and $25.26 middle Bollinger Band. While the RSI and MACD hint at a potential reversal, the 100D MA at $29.93 remains a towering obstacle. Traders should prioritize the GLXY20260109C22 call option for a $25.26 breakout, but monitor the sector leader BlackRock (BLK) which is up 1.56%. A sustained move above $24.865 would validate the bullish case, but failure to hold $24.46 could trigger a retest of the 52-week low. Act now: Buy the GLXY20260109C22 into a break above $24.865 with a stop at $24.46.