What Happened?
NVIDIA’s stock price recently triggered a “Death Cross” signal, raising concerns in the market about its potential downward trend and prompting a review of historical instances when similar signals led to significant price corrections. Despite the appearance of the bearish “Death Cross” signal, analysts suggest this is not necessarily a definitive warning of a decline. It may instead reflect recent price fluctuations, and market reactions to AI-related cryptocurrencies are also mixed.
NVIDIA Stock Experiences a Death Cross
The annual GTC conference of chip manufacturing giant NVIDIA is always a major event in the tech industry, attracting significant attention from investors. However, following this year’s GTC conference, NVIDIA’s stock price dropped, even triggering a “Death Cross,” raising concerns in the market. The “Death Cross” is a technical analysis sell signal that occurs when a stock’s 50-day moving average falls below its 200-day moving average.
NVIDIA’s 50-day moving average dropped to $127.39 over the weekend, falling below the 200-day moving average of $127.73. Although the stock price later rebounded, this still raised investor caution. Historically, the last “Death Cross” for NVIDIA occurred in April 2022, during a market bear phase. Over the next six months, NVIDIA’s stock price fell by 47%, only starting to recover in October 2022.
BREAKING : Nvidia $NVDA just formed a Death Cross ☠️ for the first time since April 2022
The last one sent shares plunging 47% over the next 6 months
After an astonishing 948% surge in stock price since October 2022, the appearance of the “Death Cross” once again has investors questioning whether this signals another significant decline, making it a focal point in the market.
However, Ari Wald, the head of technical analysis at Oppenheimer & Co., believes that this “Death Cross” may not be entirely reliable and could even be a “false signal.” He pointed out that not every “Death Cross” leads to significant downturns, and the current situation might reflect NVIDIA’s price range-bound movement over the past year. Wald stated that NVIDIA’s stock has shown little progress over the past 6-9 months, signaling weakening momentum. He currently holds a wait-and-see stance on NVIDIA stock, awaiting broader market bottom signals. He also noted that $128 is a key resistance level, while $100 serves as an important support level for NVIDIA stock.
Why Did NVIDIA’s Stock Price Drop?
So, why did NVIDIA’s stock price drop and form a “Death Cross” after the much-anticipated GTC conference?
Several factors may have contributed to this. First, the “Sell the News” effect may have played a role. Before the GTC conference, the market may have already priced in optimistic expectations for NVIDIA, with many investors buying in advance. Once the conference ended, regardless of how positive the announcements were, some investors might have chosen to lock in profits, leading to a price pullback.
Second, although the GTC conference presented several innovative technologies and products, these did not fully exceed the market’s high expectations. Maribel Lopez, founder of Lopez Research, stated that most of the topics discussed by Jensen Huang at the conference were familiar, and emerging technologies like quantum computing and robotics are unlikely to become NVIDIA’s main revenue sources in the short term. Their development pace is also much slower than NVIDIA’s core chip business. Huang himself also agreed with this view, acknowledging that it will take time to see tangible returns from the quantum computing and robotics fields.
Additionally, China’s media outlet Xinhua Eye pointed out that the possible reasons for the decline in NVIDIA’s stock price after the conference could include unmet market expectations, with much of the content presented being a continuation of the established roadmap, lacking surprise elements. Furthermore, cloud service providers like Amazon and Google developing their own AI chips may reduce future reliance on NVIDIA. More concerningly, Chinese startup DeepSeek has launched a low-cost inference model, which allegedly achieves similar results using fewer NVIDIA chips, raising investor concerns about the potential demand for NVIDIA’s high-premium chips.
These factors likely contributed to investor concerns about NVIDIA’s future growth prospects, thereby putting pressure on its stock price.
Will NVIDIA’s Stock Price Drop Affect AI Cryptocurrencies?
Interestingly, NVIDIA’s stock performance could also influence AI-related cryptocurrencies. Some cryptocurrency analysts believe that the price of AI cryptocurrencies is linked to NVIDIA’s stock performance. For example, before NVIDIA’s Q2 2024 earnings report, AI-related coins had surged by nearly 70%.
However, despite NVIDIA’s stock showing a bearish trend before the market closed on March 21, some AI cryptocurrencies, such as Render (RNDR), Bittensor (TAO), and Artificial Superintelligence Alliance (FET), saw price increases afterward. This suggests that the AI cryptocurrency market may not be strictly tied to NVIDIA’s stock price.
As AI becomes more mainstream, more cryptocurrency traders believe the market’s AI hype is beginning to cool. Data shows that over the past month, the total market value of top AI and big data cryptocurrencies has dropped by 23.7%. However, this does not mean AI has no future in the blockchain world. A recent CoinGecko survey revealed that nearly half of cryptocurrency experts are optimistic about the price of AI cryptocurrencies in 2025. About 25% of respondents are “completely optimistic,” while 19.3% are “somewhat optimistic.”
In other words, those AI coins focused solely on speculative trading for quick profits are likely to disappear. Only projects that genuinely provide market solutions and generate revenue will survive in the long run.
Reference: businessinsider, cointelegraph