In the past two weeks, Ethereum has experienced a significant pullback. Serving as a crucial reference and leading indicator for the current market cycle, Ethereum (ETH) is the leader of the cryptocurrency market and also an important benchmark for the U.S. stock market. Earlier this year, Bitcoin played a similar role. There is reasonable suspicion that risk assets may be facing a round of adjustment.
Ethereum futures have fallen below the previous weekly low level for the first time since May this year. Historically, such breaches at high levels tend to lead to sustained downward trends. Although Bitcoin has not yet experienced a similar breach (it has not fallen below its August low), Bitcoin in recent months has primarily acted as a passive follower rather than a leading force; therefore, Ethereum’s trend remains the key focus.
Nevertheless, comparing the relative strength between the two can help gauge the overall sentiment in the crypto market: the ETH/BTC pair has seen four weekly declines in the past five weeks. Excluding these five weeks of decline, the pair has only posted five weekly losses since April this year. In other words, Ethereum’s leading position has been shaken and may possibly lead the entire cryptocurrency market into an adjustment phase.
Correspondingly, the situation between Nvidia and the U.S. stock indexes presents a similar comparison. Compared with the relatively steady slow-bull trend in the stock indexes, Nvidia has been oscillating within a roughly 10% range since August and has not synchronized to set new highs. It has been emphasized repeatedly that after the tariff card against foreign imports failed to succeed, President Trump's approach reverted to the original mode.
Normally, core stocks and indexes should closely track each other, yet even on the Nasdaq, Nvidia has exhibited a lag. The current scenario suggests that either Nvidia will catch up with a price surge or the indexes will experience a correction. Reflecting the crypto situation led by Ethereum, the market appears to be brewing a pullback to align with the trajectory of the leading indicators.
Another market barometer worthy of attention is silver, with its price now close to historical highs. As discussed in previous articles, significant tops in silver prices often coincide with a reversal in risk sentiment. If silver’s price continues to hold its upward momentum, stability can be maintained. However, if daily or even shorter-term charts show a spike followed by a pullback reversal, it would essentially confirm an impending market downturn.
Based on the price trends and information across these multiple cross-market indicators, there is reasonable suspicion that it is time to adjust strategies and prepare for potential market responses. Although the slow-bull environment in the U.S. stock market continues, withdrawing now might seem slightly conservative, but locking in some profits is necessary. Should the crypto market and Nvidia decline further, the proportion of cash holdings should increase accordingly. Once silver signals a reversal, it will be time for a full retreat to observe the market's direction.
Lastly, reiterating the medium- to long-term perspective, under President Trump’s tenure, it is highly likely that we will witness an epic market era similar to that of 2007-2008.
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