Reddit's Bloodbath Attracts A Big Insider Buyer - Bounce Incoming?

Reddit Inc. (NYSE:RDDT) has been taken to the woodshed in 2026. The stock is down roughly 46% year-to-date, momentum has collapsed, and price has been living below every major moving average. But just as sentiment looks washed out, a board member stepped in with a $7.48 million insider buy. That's not pocket change — that's conviction.

Director Sarah Farrell purchased 50,500 shares around $148 over two days, boosting her ownership by more than 600%. The timing is hard to ignore.

RDDT closed recently near $131 after another sharp drop — then bounced more than 4% premarket. Someone clearly thinks the damage may be overdone.

Chart created using Benzinga Pro

RDDT Technical Setup: Deeply Oversold

The chart tells a story of exhaustion. RDDT is trading well below its 50-day (~$142), 100-day (~$177), and 200-day (~$187+) moving averages — a clear downtrend. But the RSI (relative strength index) sits near 26, firmly in oversold territory. That's often where reflex rallies begin.

The MACD (moving average convergence/divergence) indicator remains negative, but histogram bars are shrinking, suggesting downside momentum may be slowing. Volume has also expanded during the recent selloff — classic capitulation behavior.

Insider Signal Vs. Trend Reality

This isn't a clean reversal yet. The stock would need to reclaim the $142 zone to shift short-term momentum. Until then, rallies are counter-trend.

Still, large insider buying after a brutal 46% drawdown changes the psychology. It introduces the possibility that the smart money sees value where the market sees risk.

The setup now? Technically damaged — but potentially primed for a bounce.