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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