The Nikkei 225 Index bounced back above the resistance level at ¥50,000 for the first time this week as global equities soared after the recent Nvidia earnings and after the Japanese yen crash accelerated. It also jumped as investors reacted to the new stimulus deal. It has jumped by 60% from the year-to-date low of ¥30,855.

Japan stocks jump ahead of Sanai Takaichi stimulus

One of the main catalysts of the Nikkei 225 Index is a report that Sanae Takaichi, was considering launching a new stimulus package to support an economy that is showing signs of slowing down. Data released earlier this week showed that Japan’s economy shrank by about 1.8% in the third quarter. 

She will deliver a budget proposal that will be about 27% higher than what her predecessor unveiled last year. It is estimated that the deal will be worth about $112 billion and will include tax reductions and funds drawn from special accounts. 

Most importantly, together with the expected public sector spending, the impact of the package will be worth about ¥42.8 trillion. It is common for the stock market to jump when a country announces a huge stimulus plan.

Japanese yen crash 

The other major catalyst for the ongoing Nikkei 225 Index jump is that the Japanese yen has been in a strong downward trend in the past few months.

The USD/JPY exchange rate jumped to a high of 158 today, its highest level since January 15 last year. It has jumped by over 12% from its lowest level this year.

The Japanese yen has plunged even as the US dollar index has remained under pressure after falling from the year-to-date high of $110 to the current $100. The dollar has weakened substantially against other currencies like the euro, sterling, the South African rand.

Many Japanese companies are doing well. The yen is falling because it makes their exports cheaper. Some of the top beneficiaries are companies like Hitachi, Toyota, Mazda, and Mitsubishi.

Other domestic companies, especially in the tourism industry, benefit as the weaker yen makes trips to the country more affordable. 

Japan stocks are soaring because of Nvidia earnings 

The third main reason why the Nikkei 225 Index has jumped sharply in the past few days is the recent Nvidia earnings.

In a report on Wednesday, the company said that its revenue surged to $57 billion in the third quarter and predicted that its revenue will jump to $67 billion in the fourth quarter.

The company’s management also noted that there was no AI bubble. As a result, many companies in the AI industry jumped. 

Advantest, a company that supplies test equipment to firms in the semiconductor industry, jumped by 8.8% on Thursday, bringing its year-to-date gains to 122%. Tokyo Electron jumped by 5%, bringing the YTD gains to 50%.

The other non-tech gainers were companies like Hitachi, Sony, Mitsubishi UFJ, Softbank, and Nintendo, which jumped by over 2%.

Nikkei 225 Index technical analysis 

The daily timeframe chart shows that the Nikkei 225 Index has been in a strong uptrend in the past few months, moving from a low of ¥30,855 to the current ¥50,000.

It has constantly remained above the 50-day and 100-day Exponential Moving Averages, and has recently formed a morning star candlestick, which often leads to a reversal.

Therefore, the most likely scenario is where the index rebounds and continues rising, potentially hitting the important resistance level at $52,750. A move above that resistance will point to more gains in the near term.

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The Japanese yen continued its recent crash on Thursday as its run as one of the worst-performing currencies accelerated. The USD/JPY exchange rate jumped to a high of 158, up by over 12% from its lowest level in April this year. It has jumped to its highest level since January last year.

Japanese yen crashes amid stimulus hopes

The main reason why the Japanese yen crash continued is that Sanae Takaichi is considering a large stimulus package worth about $112 billion to supercharge an economy that is showing signs of slowing down. A report released earlier this week showed that the economy contracted in the last quarter.

The stimulus announcement means that the supply of the Japanese yen will continue rising in the next few months, which will devalue the currency. It also means that Japan’s public debt will continue rising, a notable thing since the country has a debt-to-GDP ratio of 230%.

The report also explains why Japan’s bond market is struggling, with the yield of the 10-year rising to 1.85%, its highest level since June 2008. It has jumped sharply from negative 0.28% in 2018. Japan’s five-year yield jumped to 1.319%, its highest level since June 2008. 

The ongoing Japanese yen crash has implications for the economy. Top exporters like Toyota and Honda will benefit as the cost of their vehicles drop to consumers. However, the risk is that it may attract ire from Donald Trump who has always accused Japan of currency manipulation to boost its exports to the United States.

Meanwhile, the Japanese yen continued its crash after a meeting of Bank of Japan officials ended without a mention of the weakening currency. It is widely expected that the BoJ has either started or is considering announcing measures to support the currency. In a statement, Minoru Kihara, the chief cabinet secretary said:

“We are concerned about the recent one-way and sudden movements in the foreign exchange market. It’s important for exchange rates to remain stable, reflecting fundamentals.”

BoJ may hike interest rates in December 

The ongoing Japanese yen crash means that the Bank of Japan will likely consider hiking interest rates in the next meeting in December. This view was confirmed by Junko Koeda, a BoJ board member who said:

“Given that real interest rates are currently at significantly low levels, I believe that the bank needs to proceed with interest rate normalization.”

An interest rate hike would come at a time when the economy is slowing and inflation has dropped steadily in the past few months. A weaker yen may push inflation higher by making the cost of key raw materials and energy rise.

USD/JPY Technical Analysis 

The daily timeframe chart shows that the USD/JPY exchange rate has been in a strong uptrend in the past few months, moving from a low of 139.86 in April to nearly 158 today.

It has formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. Also, the Relative Strength Index (RSI) has moved to 72, a sign that the upward momentum is continuing.

The Average Directional Index has moved to 22 and is pointing upwards, a sign that the uptrend is gaining momentum. 

Therefore, the most likely scenario is where the pair continues rising, with the next key resistance level to watch being at 158, its highest swing on January 10. A move above that level will point to more gains, potentially to the psychological level at 160.

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Bitcoin price remained under pressure on Thursday as investors remained in the sidelines amid elevated fear. BTC was trading at $91,940, down sharply from the year-to-date high of $126,300. This article explores some of the top reasons why the coin may rebound soon.

Bitcoin price to rebound as Crypto Fear and Greed Index slumps

One of the main potential catalysts for Bitcoin price is that investors are increasingly fearful. The Crypto Fear and Greed Index has dropped to the extreme fear zone of 15, its lowest level since April this year. It has been in a freefall after peaking at the greed zone of 80.

In theory, Bitcoin price and other cryptocurrencies should drop when market participants are fearful. In reality, however, Bitcoin and altcoins normally rebound when the fear situation gets extreme. 

A good example of this is what happened in April this year when Bitcoin and the Fear and Greed Index dropped after Donald Trump announced his reciprocal tariffs. Bitcoin price jumped to a new record high in May.

The same happens in the stock market, which normally rebounds whenever the CNN Money Fear and Greed Index tumbles to the extreme fear zone. For example, this happened in April when the index moved below 10 as the stock market plunged. Today, the top US indices like the S&P 500 and the Dow Jones are hovering near their all-time highs.

Bitcoin price always emerges from bear markets

The other main reason why Bitcoin’s price may rebound soon is that history is on its side.

Bitcoin was launched in 2009 and has succeeded in moving from below $1 to the current $91,000. Its surge to the all-time high of $126,000 has never been linear. Instead, it has always had major reversals over time.

A good example is the significant plunge that happened in 2022 as the Federal Reserve hiked interest rates and as companies like Terra and FTX imploded.

The most recent situation is when the Bitcoin price plunged by about 13% from its highest level on August 12 and its lowest level on September 1, and then rebounded to a record high.

BTC price has become oversold 

The other main reason why the Bitcoin price may rebound is that it has become highly oversold in the past few days during the ongoing crash.

For example, the Relative Strength Index (RSI) has moved to the oversold level of 30. Similarly, the Money Flow Index (MFI), which is a unique form of RSI, has moved to the oversold level of 24.

The Awesome Oscillator has moved below the zero line since October 12. Therefore, there is a likelihood that the coin will rebound as investors start to buy the dip soon.

Strong Nvidia earnings to boost the crypto market 

The other potential catalyst for Bitcoin price is the recent Nvidia earnings, which showed that its business was doing better than expected.

Data showed that Nvidia’s revenue jumped to $57 billion in the last quarter, with its management predicting that it will jump to over $65 billion in the current quarter.

The strong financial results boosted the stock market, with the Nasdaq 100 and the S&P 500 indices rising by over 1%. Nvidia itself jumped by over 5% in the premarket session. These numbers mean that other assets like the crypto market will continue rebounding. 

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Palo Alto Networks stock price has pulled back in the past few weeks, moving from the year-to-date high of $223 in October to the current $205. 

PANW will now be in the spotlight this week as the company publishes its financial results, which will provide more color on its growth. Its results come as some investors remain concerned about its valuation. 

Palo Alto Q1 earnings ahead

Palo Alto Networks, one of the biggest companies in the cybersecurity space, has done well over the years as demand for its solutions jumped. This growth happened despite the growing competition from other cybersecurity companies like Darktrace, Wiz, SentineOne, and Zscaler.

The most recent results showed that Palo Alto Networks’ business continued doing well in the final quarter of its fiscal year. These numbers revealed that its Remaining Performance Obligation (RPO) jumped by 24% to $15.8 billion.

RPO refers to the total contracted revenue that has not been recognized. It includes deferred revenue and unbilled revenue, and is a commonly-watched metric in the SaaS industry.

Palo Alto Networks’ revenue rose by 16% in the last quarter to $2.54 billion, while its operating margin rose by 150 basis points to 28.8%. This growth was likely because of platformization, which onboarded over 1,400 customers last quarter. 

PANW valuation concerns remain

Wall Street analysts are optimistic that the PANW business will report modest results on Wednesday. The average estimate is that its revenue rose by 15% in the first quarter to $2.46 billion. 

Its earnings-per-share (EPS) is expected to come in at 89 cents, up from the 78 cents it made in the same period last year. Additionally, the guidance for the second quarter is expected to come in at $2.58 billion, up by 14% YoY, while the EPS is expected to be 46 cents.

These numbers will confirm that the company’s growth, while modest, is slowing this year. The annual revenue is expected to come in at $10.52 billion, up by about 14% from the same period last year.

The main concern is that the company’s valuation has remained at an elevated level in the past few months. The company has  a non-GAAP PE ratio of 53, much higher than the sector median of 23.

Also, the GaaP PE ratio is 106, also higher than the technology sector median of 29, a sign that the valuation is significantly stretched compared to other companies. It is also more valued than a company like Nvidia, which is having faster revenue and profitability growth. 

Other valuation metrics also show that the company is not cheap. For example, the forward EV to EBITDA rose to 41, higher than the sector median of 14, while its PEG ratio of 3.59, higher than the sector median of 1.68.

Additionally, the rule of 40 metric shows that it is also highly overvalued. Its revenue growth is 14%, while the profit margin is 12%, giving it a figure of 26%.

READ MORE: Palo Alto shares jump 6% in premarket after Bank of America upgrade

PANW stock price technical analysis 

The daily timeframe chart shows that the PANW stock price has pulled back in the past few weeks, moving from the year-to-date high of $223 to the current $205. 

Palo Alto Networks has moved below the important support level at $210, its highest level in July this year. It has also moved below the 50-day Exponential Moving Average (EMA).

On the positive side, the stock has formed a morning star pattern, a common bullish reversal sign. Therefore, the stock will likely bounce back after earnings, and potentially hit the key resistance level at $220.

However, the valuation concerns may drag it lower, potentially to the psychological level at $200.

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Webull stock price has been in a strong bearish trend in the past few months, erasing all gains it made shortly after going public a few months ago. BULL was trading at $8.80 on Friday, down sharply from the all-time high of $79.5. So, is BULL stock a good buy ahead of its earnings?

Webull stock price technical analysis 

The daily timeframe chart shows that the BULL stock price surged from the IPO level of $10 to a high of $79.52 within days. This surge made it one of the best-performing IPOs of the year. 

BULL stock price then pared back these gains, culminating to a drop to a record low of $8.80. This plunge has brought its market cap from a record high of $28 billion to the current $4.28 billion. 

The daily chart shows that it has continued falling in the past few months. It has moved below the important support at $10.19, its lowest swing in July this year. This price was the lower side of the inverse cup-and-handle pattern. 

Webull share price has remained below the 50-day Exponential Moving Average (EMA). That is a sign that bears remain in control for now. 

READ MORE: How low can the Bitcoin price get in this bear market?

The Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have continued falling in the past few months. The RSI has moved below the oversold level, while the Percentage Price Oscillator (PPO) has dropped to a record low.

Therefore, the most likely scenario is where the BULL stock price rebounds, potentially after its earnings this week. Such a move will see it rebound to the key resistance level at $10.18, which is about 17% above the current level.

Webull earnings ahead

The main catalyst for the Webull share price is the upcoming earnings, which will shed more light on its business. These results will provide more information on whether its business is growing. 

The most recent results showed that its revenue jumped by 46% YoY to $131 million. Notably, the company’s adjusted operating expenses rose modestly to $108 million. 

The results revealed that the number of registered users rose to 24.9 million, up by 18%. Its funded accounts rose by 9% to 4.73 million. Most importantly, the company’s assets jumped by 64% to over $15.9 billion. 

The company anticipates that its business will continue doing well by adding customers in its core markets and in new ones. For example, it has moved to Latin America, where it offers services in countries like Brazil and Mexico. It also expanded to the Netherlands and Australia.

Webull also aims to grow by adding more services to its network. For example, it has partnered with Kalshi to offer prediction markets, one of the hottest businesses today. 

The company has also expanded to the cryptocurrency market, which has delivered strong numbers for Robinhood, its top rival in the United States. 

Analysts expect the upcoming results showed that its revenue will be $137 million, up from $101 million in the same period last year. The most optimistic analyst expects its revenue to come in at $141 million. 

Analysts also believe that the company’s annual revenue will be $529 million, followed by $689 million next year. Its earnings per share (EPS) is expected to rise to $0.1, followed by $0.17 in 2026.

READ MORE: Here’s why the S&P 500 Index and ETFs like VOO, SPY are falling

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Plug Power stock price has pulled back and moved into a bear market, erasing some of the gains made in September and October. PLUG has retreated by over 50% from its highest point this year, lowering its market cap from $4.8 billion to $3.12 billion. So, is it safe to buy the PLUG stock dip?

Plug Power stock price technical analysis 

The daily timeframe chart shows that the PLUG stock price bounced back from the YTD low of $0.6850 to a high of $4.58. This surge happened as the company announced some notable deliveries, including a 5 MW electrolyzer installation for Hollandia for the H2Cast Project. 

These gains were relatively short-lived as the stock plunged by double-digits. It has now plunged close to the 61.8% Fibonacci Retracement. 

Plug Power stock has moved below to 50-day Exponential Moving Average (EMA) and the Strong, Pivot, Reverse level of the Murrey Math Lines tool.

The stock has moved below the Supertrend indicator, a sign that bears are in control for now. It has also dropped below the Ichimoku cloud, while the Relative Strength Index (RSI) and the MACD have all continued moving downwards.

Therefore, the most likely scenario is where the stock continues falling, potentially to the next key support level at $1.56. This support is an important level as it is along the Ultimate Support of the Murrey Math Lines tool and is slightly above the 78.6% Fibonacci Retracement level.

Still, there is a slim chance that the PLUG stock price will bounce back as investors buy the recent dip. Such a move will push it to the Major S/R pivot point of the Murrey Math Lines tool at $3.13. 

PLUG stock price chart | Source: TradingView

Plug Power losses are a concern 

The main bearish catalyst for the Plug Power stock price is that its business continues to lose substantial sums of money.

A report released last week showed that its net revenue rose to $177 million in the last quarter from the $173 million it made in the same period last year.

Its revenue growth was driven by its electrolyzer business and the robust volume of its hydrogen business. Electrolyzer sales dropped to $96.7 million from the previous $107 million. 

The power purchase agreements’ revenue rose to about $24 million, while the fuel delivered to consumers rose to $35 million. Its CEO said:

“Plug continues to execute, follow through on its commitments, and prove the viability of hydrogen at scale. We’re seeing real adoption, real projects, and real performance, and we’re still only getting started.”

While its revenue growth was encouraging, the company continued to lose millions of dollars. Its operating loss jumped to $228 million from the previous $116 million, while its net loss was $363 million. The net loss in the first nine months of the year rose to nearly $800 million.

As such, while the company has a high backlog, it has been unable to convert this into positive profits. It is unclear whether the management will hit the cash flow metrics it set a few months ago at the JPMorgan Industrials Conference.

The other main risk for Plug Power is that it may need to raise additional cash if its losses accelerate. It ended the last quarter with $165 million in cash and equivalents and $189 million in restricted cash.

Additionally, the company continues to face substantial pressure from short-sellers, who continues to bet against its execution. The short interest has moved to 22%, making it one of the most shorted companies in Wall Street. Still, this also means that the company may go through a short-squeeze, as it happened a few months ago.

READ MORE: Plug stock skyrockets 22% today: 5 key reasons behind the rally

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Tilray Brands stock price has plunged and moved into a bear market after falling by over 53% from its highest point this year. It has moved from a high of $2.32 in October to the current $1.08. It is hovering at the lowest level since September 11. So, what’s next for the TLRY stock?

Tilray stock price technical analysis 

The daily timeframe chart shows that the Tilray Brands stock price has been in a strong downward momentum in the past few months. It has plunged from the October high of $2.32 to the current $1.08. 

The stock has moved below the 61.8% Fibonacci Retracement level at $1.11. It has moved below the strong pivot, reverse point of the Murrey Math Lines tool at $1.17. 

Tilray stock price has moved below the 50-day and 100-day Exponential Moving Averages (EMA). The two averages are nearing their confluence, which will form a mini death cross indicator.

TLRY has moved below the Ichimoku cloud and the Supertrend indicators, a sign that bears are still in control. Therefore, the most likely scenario is where it continues falling to the ultimate support at $0.78. This target is alongside the 78.2% Fibonacci Retracement level. 

On the flip side, a move above the 50% Fibonacci Retracement level at $1.35 will invalidate the bearish outlook.

TLRY stock chart | Source: TradingView

Why TLRY stock price is crashing

There are two main reasons why the Tilray stock price is in a deep bear market. First, the ongoing crash is because Donald Trump is yet to make his decision on the reclassification of cannabis into a less dangerous drug in the United States. That reclassification will move it from a Schedule 1 to a Schedule 3 drug. 

Such a move would be important as it would recognize its role in the medical industry. It would also simplify business operations by making it easier to access banking solutions in the country. As things stand today, cannabis companies find it hard to access national banks.

Donald Trump mentioned that he was “within weeks” of making its decision on cannabis in August, but no decision has been made yet. There is a chance that he may decide against reclassification because of the rising pressure from conservatives. The continued delay also explains why other cannabis stocks are crashing. 

Tilray Brands stock price has crashed because of its recent earnings, which showed that its revenue and profits rose modestly. Its revenue rose by 5% in the last quarter to $209 million, while its net income rose to $1.5 million. 

A closer look at its business shows that the cannabis revenue rose by 5% to $64.4 million. Its distribution and wellness businesses made over $15.2 million and $74 million. 

However, its beverage business, which it has invested heavily on, continued to deteriorate, with its revenue falling to $55.7 million. This is a key reason why its stock has dropped, as it signals that its most important strategic investment is not paying off.

On the positive side, the company’s balance sheet is improving, with its cash balance rising to $264 million.

READ MORE: Tilray stock: why options data is skewed to downside despite solid Q1 earnings

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XPeng stock price crashed by over 10% on Monday and officially moved into a bear market after crashing by over 20% from its highest level this year. This crash happened after the company published strong financial results, but warned about its growth amid soaring competition in China. XPEV was trading at $22, with its market capitalization being over $21 billion.

Xpeng reported strong financial results

Xpeng, one of the biggest players in the electric vehicle industry, published strong financial results on Monday. These numbers revealed that the company delivered 116,007 cars in the third quarter, up sharply from 46,533 in the same period last year. It had sold 30,207 vehicles in the second quarter of the year.

These numbers confirmed that Xpeng is one of the fastest-growing electric vehicle companies in the world. Indeed, a recent report showed that BYD’s sales lost momentum in the second quarter, continuing a trend that has been going on in months.

Xpeng’s revenue rose by 101% in the third quarter to RMB 20.38 billion, which is equivalent to about $2.86 billion. In contrast, Tesla’s revenue rose by 12% to $28 billion, helped by increased purchases in the US ahead of the tax credit expiry.

On the other hand, BYD, the biggest company in China, declined by 3% to RMB 194.9 billion or $27 billion.

XPeng’s gross margin continued rising, moving from 15.3% in Q3’24 to 20%, a sign that the company is making more money per vehicle sold than it did a few years ago.

At the same time, the company’s net loss improved to RMB 38 billion or $0.05, meaning that its profitability is nearing.

Therefore, the Xpeng stock price crashed as investors reacted to its guidance, which was much lower than what analysts were expecting. It expects to make between 21.5 billion yuan or $3.03 billion and 23 billion yuan. Analysts were expecting the company to make about 26 billion.

The company’s reduced guidance was due to the ongoing competition in the country. This competition is coming from companies like Nio, BYD, Xiaomi, and Zeekr. 

Xpeng has potential catalysts ahead. For example, it plans to launch its flying cars in 2026, a move that may lead to more growth over time. In its recent AI Day, the company unveiled its plan to grow its robotaxi and humanoid robot. In a statement, the CEO said:

“Centered around physical AI applications, we are developing a comprehensive portfolio of technologies and products, alongside a thriving business ecosystem, thereby creating greater value for customers and shareholders worldwide.”

Xpeng stock price technical analysis

The daily timeframe chart shows that the XPEV stock price has crashed in the past few months. It has plunged from a high of $28.3 earlier this month to the current $22.45. 

Xpeng stock price has remained above the 50-day and 100-day Exponential Moving Averages (EMA). It also remained above the lower side of the ascending channel. 

XPEV share price remained above the Strong, Pivot, Reverse point of the Murrey Math Lines tool. Therefore, the stock will likely have a strong rebound, potentially to the Major S&R pivot point at $25. 

On the flip side, a move below the lower side of the channel will point to more downside, potentially to the ultimate support at $18.75. 

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The crypto market crash continued on Tuesday, with Bitcoin plunging below the important support level at $90,000. Most altcoins were in the red, with their market capitalization falling to $3..07 trillion from $4.27 trillion in October.

Reasons for the ongoing crypto market crash

There are a few reasons why the crypto market crash is happening. One of them is that liquidations soared by 57% to over $1 billion. Nearly 200,000 traders were liquidated, with one Bitcoin whale losing $97 million.

Bitcoin liquidations jumped to $563 million, while Ethereum positions worth over $175 million were liquidated. Liquidations have remained at an elevated level in the past few weeks, pushing more investors to stay on the sidelines.

Bitcoin and Ethereum ETF outflows continued

The crypto market crash also happened as ETF outflows continued. All spot Bitcoin ETFs shed over $254 million in assets on Monday, the fourth consecutive day of losses. They have shed almost $2 billion in assets in the last 4 trading days.

Similarly, Ethereum ETFs have continued to shed assets this week. They had over $182 million in outflows, bringing all outflows this month to over $1.42 billion. These numbers mean that there is less demand for these coins from American investors.

Nvidia earnings jitters

The crypto market crash coincided with the performance of stocks. Data shows that the top American indices like the Nasdaq 100, S&P 500, and Dow Jones dropped by over 1% on Monday. This decline happened as market participants waited for the upcoming Nvidia earnings, which will come out on Wednesday this week.

Nvidia is one of the most important companies this cycle because of its role in artificial intelligence (AI), where it provides the most advanced GPUs, which are used by top companies like Microsoft, Google, and Amazon.

Analysts expect the upcoming results to show that Nvidia’s business continued doing well in the third quarter, with its revenue expected to come in at $55 billion and its earnings-per-share (EPS) surging to $1.25.

Strong Nvidia earnings and guidance will provide more information about the ongoing AI spending and what to expect in the coming months. These numbers will likely boost the performance of the stock and crypto markets.

Why a cryptocurrency market recovery is possible

Historically, such periods of despair have proven to be the best times to buy. A good example of this is what happened in April when Donald Trump announced his reciprocal tariffs, leading to a strong crash of Bitcoin and other altcoins.

One sign that a crypto market bull run is around the corner is the fact that there is extreme fear. The Crypto Fear and Greed Index has plummeted to the extreme fear zone of 14. In most cases, crypto bull runs happen when investors are extremely fearful. Bear markets, on the other hand, as shown below, the crypto bear market normally starts when investors are greedy.

The other reason why a crypto market recovery is possible is that analysts believe that we are still in the bull market cycle. In a statement, Tom Lee, the head of BitMine said:

“When a market maker has a ‘hole’ on their balance sheet, they are seeking to raise capital and are reducing their liquidity functions in the market. This is the equivalent of quantitative tightening for crypto and has the effect of dampening prices. In 2022, this QT effect lasted for 6-8 weeks. And this is probably happening today.”

The crypto market may also recover because most coins have now become highly oversold. For example, the Relative Strength Index (RSI) of the total crypto market cap has dropped to 29, while the Stochastic has moved to below 10. Oversold conditions normally attract dip buyers.

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Robinhood stock price has pulled back in the past few days, moving from this month’s high of $150 to the current $115. It has formed a risky pattern, pointing to more downside in the coming weeks as the crypto market retreat continues. 

Robinhood stock faces potential risks ahead

Robinhood stock has done well this year as it jumped from the year-to-date low of $30 to a record high of $155. This jump happened as the company’s business continued to thrive amid the rising volatility and demand in the options market. 

The most recent results showed that its business continued improving, with the number of users, revenues, and profitability accelerating. 

Robinhood ended the last quarter with over 3.88 million gold subscribers and 26.8 million funded customers. The amount of money in its platform jumped to over $388 billion from $152 billion in the same period last year.

This growth translated to higher revenue and profitability. Its net revenue soared from $637 million in Q3’24 to $1.27 billion in Q3’25, making it its best quarter in years. Also, the net income rose to over $556 million.

Robinhood has benefited from numerous tailwinds. For example, more Americans are trading options today than they did in the past. This growth has translated this segment into its best performer. 

The company has also continued to innovate, including using the blockchain technology. It has already started offering hundreds of tokenized stocks and cryptocurrencies to European customers. It is also working on its own layer-2 blockchain network.

Additionally, the company has become a major player in the crypto industry. Its business here is doing well even as other companies like Coinbase, Bullish, and Gemini struggle. Its crypto volume jumped by 458% YoY, mostly because of its Bitstamp acquisition.

Still, Robinhood stock faces three main risks. First, it has become a highly valued company, with its forward P/E ratio being 60, much higher than the sector median of 11. Its non-GAAP P/E ratio is 52, also higher than the sector median of 10.

Second, the company’s crypto business could face headwinds as the crypto market crash accelerates. Historically, crypto bear markets lead to lower volume and revenues to companies in the industry.

HOOD stock price analysis

The other major risk facing the HOOD stock price is that it has formed a double-top pattern at $150. This pattern is made up of two peaks and a neckline. In this case, the neckline is at $120, its lowest level on October 22nd.

The stock has also moved to the Strong, Pivot, Reverse level of the Murrey Math Lines tool at $112.8. It has also moved below the 50-day and 100-day Exponential Moving Averages (EMA).

HOOD stock has moved below the Supertrend indicator, a sign that bears remain in control for now.

At the same time, the Relative Strength Index (RSI) and the MACD indicators have continued to move downwards. Therefore, by measuring the depth of the double-top pattern and then projecting the same from the neckline, the most likely HOOD stock price forecast is $96.

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