Top Reasons SpaceX Stock Is Crashing

SpaceX Stock extended its sharp pullback on Thursday as the early IPO excitement continued to fade. SPCX fell for a second straight session after posting strong gains during its first days of trading. 

The stock is currently approximately 12% lower than the recent high, casting doubt on valuation, momentum, and risk appetite of investors. At the time of reporting, SPCX was priced at $183, which has declined by 5% in the open session.

Here’s Why SpaceX Stock is Going Down

SpaceX went public last Friday in a blockbuster IPO. The company priced shares at $135, while trading opened at $150. On the first day of trade the stock rose over 19%.

That robust initial issue caught the attention of retail and institutional investors. However, the buying frenzy has started to cool. SPCX dropped after breaking a three-day winning streak, with profit-taking adding pressure.

The recent downturn was also due to the weakening of wider markets. Investors reacted to the Federal Reserve’s decision to hold rates steady. The central bank also indicated a tighter way, which is damaging to risk assets.

Fed Pressure Hits SPCX And Crypto Markets

The crypto market was also falling down due to the macro pressure. The overall crypto market cap declined 3.76% to $2.16 trillion in 24 hours. Bitcoin dropped below $63,000, while Ethereum traded below $1,700.

Other key support levels were also close to several major altcoins. The shift indicated a lack of interest in speculative assets in markets. A stronger U.S. dollar also weighed on non-yielding assets.

Both crypto assets and high-growth stocks were impacted by that environment. SpaceX Stock experienced pressure as investors pulled out of risky trades. The SPCX is trading higher than its closing price on the opening day, though the momentum is dwindling.

Valuation Concerns Weigh On SpaceX Stock

The pullback does not necessarily make SpaceX Stock cheap. The company continues to trade at a high value relative to the current revenue. In the first quarter, SpaceX earned a revenue of 4.7 billion.

Elon Musk remains much more optimistic than Wall Street analysts. He has estimated that SpaceX has the potential to make more than 1 trillion sales by 2030. Analysts are however more wary of that growth path.

SpaceX is also preparing its first investment-grade U.S. dollar bond sale. The offering is anticipated to refinance a bridge loan that will mature in 2027.

For now, SPCX may remain volatile. Sharp price swings may remain in focus as a result of limited tradable shares, profit-taking, and valuation issues.

How Low Will SpaceX Stock Go This Week?

SpaceX Stock later recovered from the morning selloff and moved back above $180. The recovery indicated buyers protecting on the downslope. Nevertheless, the price continued to trade below the previous breakdown area.

Immediate resistance is currently around $185. Another test of $190 could be supported by a clean move above that level as per the future Space X outlook. In case buyers recapture the loss of $190, the second resistance could be around $200-$220.

On the downside, the first key support is still at $180. Any fall below that would undermine the recovery effort. SpaceX Stock can subsequently recheck the $170 zone. When the selling pressure is high, the more profound support level is around $160.