Insights 
VT 
Shares of Robinhood (HOOD) have shown signs of weakness following a dramatic 422% increase since April 2025. Technical analysis indicates a potential drop to $120 per share, impacted by a reversal engulfing candle and a restrictive parallel channel.
This bearish signal appeared at the high end of the channel, and despite broader market rallies, HOOD shares have not benefited. A further decline to $120 could test the stock’s resilience, as comparisons with other trading platforms raise valuation concerns.
Challenges Facing Robinhood
HOOD has been popular among retail traders, but it faces a challenging market environment. The valuation metrics for Robinhood are extremely high, and there’s potential for its price to drop below $100.
Other market movements are notable, including gold trading above $4,100 per ounce and Ripple (XRP) maintaining support at $2.40. The EUR/USD and GBP/USD pairs face their own dynamics amid global economic uncertainties.
Additionally, Ripple is experiencing stability in its derivatives after recent volatility. Digital asset experts like Karim AbdelMawla anticipate a continuation of the crypto bull market, potentially lasting another six to twelve months.
Shares in Robinhood look tired after an incredible run-up since April of this year. We saw a bearish reversal signal back on October 6th at the top of its price channel, suggesting the momentum is gone. Even with the broader market rallying, HOOD has not been able to gain ground, which is a significant sign of weakness.
Strategizing Robinhood Investments
For traders, this points towards buying put options to profit from a potential drop to the $120 target. Looking at options expiring in November or December 2025 would make sense, with strike prices around $150 or $140. This is a direct way to bet on the analysis that the stock is ready for a significant pullback in the coming weeks.
This technical weakness is backed by some concerning numbers we are seeing. Recent reports for Q3 2025 showed that monthly active users stalled at around 15 million, failing to grow for the first time since the rally began earlier this year. Furthermore, its price-to-earnings ratio is sitting above 90, which is drastically higher than competitors like Charles Schwab (SCHW), which we see trading at a multiple of around 22.
Given the stock’s massive run, implied volatility is high, making puts expensive. A better risk-defined strategy could be a bear call spread, where we would sell a call option and buy a further out-of-the-money call to limit risk. This approach profits if the stock stays flat or goes down, and it benefits from the high volatility.
We should also note that HOOD’s weakness is happening while the Dow Jones continues to rebound. This divergence is a classic bearish signal, suggesting money is rotating out of high-flyers like Robinhood. The general market’s strength provides a poor excuse for HOOD’s inability to rally, reinforcing the bearish outlook.
