Wolfe Research analysts have issued a stark warning that the recent plunge across cryptocurrencies may be an early indicator of wider market weakness, pointing out that digital assets are now “rolling over vs. equities,” a pattern that has historically preceded significant market drawdowns.
In a new report, the firm acknowledged a swift reversal in sentiment, writing, “How quickly things can change. Our previous Crypto Report from two weeks ago was titled ‘Bending, But Not Breaking.’ Well, it’s clear that we have now broken.”
According to Wolfe, nearly every major cryptocurrency outside of Bitcoin (BTC) and Ethereum (ETH) has fallen sharply, with most down by double digits over the past two weeks. Even crypto-related equities, which had been holding up earlier in the quarter, have also suffered steep pullbacks.
While the analysts noted that the crypto market has shown “resilience time and time again,” they added that there is “a clear message being sent here.” The report drew parallels to two previous instances, in March 2024 and February 2025, when crypto underperformed equities, both of which were followed by broader stock market declines. “Does recent history repeat?” the note asked pointedly.
Wolfe’s analysts also tied the timing of the downturn to Bitcoin’s well-known four-year halving cycle. They observed that historically, Bitcoin’s price tends to peak between 518 and 547 days after each halving event. “Today would mark day 550,” the note stated, suggesting the selloff may be arriving “right on cue.”
The firm cautioned that the next few trading sessions could prove decisive. “The real tell regarding this recent crypto sell-off will come as coins enter oversold territory at support,” Wolfe wrote. “Failure to respond would raise major red flags, not just for Crypto Coins and Equities, but for the market more broadly.”
With risk sentiment already fragile across global markets, Wolfe’s warning adds to growing concerns that digital assets could once again serve as the “canary in the coal mine,” flashing early warning signs of deeper weakness ahead.
