The recent surge in Robinhood”s stock price, which has increased by nearly 23% since hitting a low of $71 on February 5, masks significant underlying challenges. Despite posting its best financial year to date, the company”s performance is marred by declining cryptocurrency activity, dwindling funds, and escalating technical risks that indicate this recovery may not be sustainable.
In 2025, Robinhood reported impressive financial results, with full-year revenue reaching approximately $4.5 billion, marking a more than 50% increase compared to the previous year. The net income approached $1.9 billion, and the fourth quarter saw a 27% rise in revenue, with earnings per share exceeding expectations. Growth was evident in options trading, interest income, and Gold subscriptions, illustrating that Robinhood is diversifying its offerings beyond just meme stocks and cryptocurrencies.
However, the company is grappling with a significant decline in its crypto revenue, which dropped by 38% year over year to around $221 million. This decrease is attributed to the downturn in Bitcoin”s performance and lower trading volumes. The substantial role that cryptocurrency plays in Robinhood”s overall activity means this slowdown adversely affected total revenue, resulting in fourth-quarter sales that fell short of analyst projections by approximately $50 million. Following these earnings, Robinhood”s stock experienced a decline of about 7% in after-hours trading, underscoring the market”s perception of crypto as a substantial risk factor.
As Robinhood”s stock price struggles to maintain momentum, it is also facing technical challenges. The price broke below a falling channel on February 2, leading to a sharp decline of nearly 30%. While the $71 mark provided some support, the ongoing weakness in crypto could push prices lower. The rebound since February 5 appears fragile, occurring within a broader downtrend rather than signaling a new uptrend.
Investor confidence is waning, as indicated by the Chaikin Money Flow (CMF) indicator, which remains negative. This suggests that institutional investors are either exiting or holding back. Even during the recent rebound, the CMF did not exceed the zero line, highlighting a lack of strong backing from large investors. Additionally, Robinhood faces a potential “death cross” risk, where the 50-day exponential moving average (EMA) is poised to fall below the 200-day EMA, a pattern historically associated with prolonged weakness.
Despite some signs of retail accumulation, as shown by On-Balance Volume (OBV) forming higher lows while the stock made lower lows, this alone is rarely sufficient to reverse a trend, particularly without robust demand from institutional players. The current market structure remains bearish, with Robinhood trading within a falling channel since October. A new channel formation suggests that if the lower trendline breaks, the stock could face a decline exceeding 40%. The critical price level to watch is $71; a breach below this could lead to further drops, with the next significant zone near $55.
For upward momentum, the stock needs to reclaim resistance levels at $87 and $98 to indicate a healthier short-term structure. Beyond these points, $107 and $119 represent significant barriers that must be overcome.
