Key Insights:
- Nvidia stock price is at risk of crashing to $150 in the near term.
- The company warned about its revenue growth as the AI demand cools.
- An NVDA crash could hit top AI crypto coins like TAO and VIRTUAL.
Nvidia stock price remained under pressure on Friday, Aug. 29, as it crashed by 1% in the premarket session. NVDA fell to $178, down from the year-to-date high of $185. This article explores why it may plunge to $150, a move that will drag top AI crypto coins.
Nvidia Stock Technical Analysis Signals a Crash to $150 is Likely
NVDA stock price has moved sideways in the past few weeks, and its quarterly earnings did not help. On the positive side, Wall Street analysts have maintained their bullish outlook for the stock.
The average analyst estimate for Nvidia’s stock price is $205, up from this week’s low of $195. This average rose after most analysts, including those from companies like Morgan Stanley, Barclays, Wolfe Research, and Rosenblat,t boosted their forecast to over $200.
However, Warren Buffett always advises investors to be fearful when everyone is bullish. In this case, technical analysis suggests that the NVDA stock price may be at risk of plummeting to $150 in the coming weeks.
The daily timeframe chart shows that the NVDA stock price has rebounded from $86 in April to a high of $185 this month. There are three main reasons why it may crash in the coming weeks or months.
First, the MACD and the Relative Strength Index (RSI) have formed a bearish divergence pattern. This divergence happens when these indicators start to move downwards during a downtrend
In the MACD’s case, the two lines have already crossed each other and are pointing downwards. The Relative Strength Index has dropped from the overbought level of 79.6 in July to 57 today, and is at risk of more downside in the coming weeks.
Second, the Nvidia stock price may go through mean reversion, where an asset drops back to the historical averages. In this case, the 200-day moving average is at $141, while the 100-day MA is at $155. Therefore, if this concept works out, there is a risk that it will move to $150, and even below.
Third, the NVDA share price may crash to form a rare pattern known as a break-and-retest. This situation is where an asset makes a strong bullish breakout above a key resistance and then retests it. Such a move is usually bullish as it confirms the previous trend.
In Nvidia’s case, it crossed the important resistance at $152 in July as the rally accelerated. This was an important resistance as it had the highest swing in November and January of last year.
Alibaba and Cambricon are Risky for Nvidia and AI Crypto Coins
There are three main risks that Nvidia stock and top AI crypto coins like Bittensor, Virtuals Protocol, and Arweave are facing. The first one is that the company warned that its revenue growth will decelerate in the next quarters as the AI boom slows. Lowering of this expectation is one of the top reasons why the NVDA stock has crashed after earnings.
The other major risk is that Chinese companies are working hard to develop their new advanced chips. In an exclusive story, WSJ noted that Nvidia had developed a new more powerful chip that a local Chinese company will manufacture.
Alibaba joins other top Chinese companies like Cambricon that build powerful AI chips. The implication is that Nvidia may struggle to regain its market share in the country over time.
Further, there is a risk that Nvidia will still rely mostly on a few American companies like Microsoft and Amazon. These hyperscalers now account for about 50% of its revenue. The risk here is that its earnings will be affected if these firms decide to slow their AI investments.
Summary on Nvidia and AI Crypto Tokens
Nvidia and some AI crypto tokens like Bittensor and Render have done well during the ongoing I boom. All AI crypto coins tracked by CoinGecko show that their market cap has jumped to nearly $30 billion.
However, there are now risks that this boom could end after Nvidia warned about its growth and new competitors like Cambricon and Alibaba moved in the game.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
