The once unstoppable rise of Nvidia (NASDAQ: NVDA) in the stock market may be coming to an end, with market indicators pointing towards a potential downfall for the technology giant. As the AI craze reaches a tipping point, investors are starting to question whether the standout winner of this boom phase is ready to fall back to earth.

In June, Nvidia reached an astonishing equity market capitalization above $3.3 trillion, an unprecedented feat for a company in the highly competitive and cyclical semiconductor business. However, the idea of "risk" should not be lost on investors, as the stock's valuation could potentially act like a Greek tragedy lesson of Icarus flying too close to the sun.

Observers have been cautioning about Nvidia's boom valuation and the psychological factors driving it for some time now. The stock's share price has been skyrocketing with hopes of instant AI riches, but concerns have been raised about the sustainability of this upward trend. Now, cracks in the bull run have started to appear, signaling a possible shift in the market.

Examining Nvidia's current trading action through various charts, troubling signs emerge. The Renko chart, which tracks the volume required to move price a set amount, reveals a significant selloff since late June, indicating the most consequential downturn in price change since the massive rally began in October 2022. The question remains: will this selloff continue?

Popular momentum indicators, such as the Accumulation/Distribution Line, Negative Volume Index, and On Balance Volume, have also started to show signs of weakness. These indicators, which had been exhibiting strong bullish momentum for the past eight months, have been rolling over since reaching their peak in June. The last time all three were trading below their 50-day moving averages was September 2024, suggesting a potential reversal in the coming weeks.

Perhaps most concerning for Nvidia bulls is the imbalance of selling in July, coupled with a rare absence of buyers. The negative readings in the 20-day Chaikin Money Flow, 14-day Ease of Movement, and 13-day Force Index numbers highlight a significant decrease in buying activity. This is further supported by the sharp decline in the Ease of Movement calculation, indicating a lack of buying interest and potential exhaustion of the share price's peak altitude.

Drawing parallels to previous market downturns, the current EMV (Ease of Movement) pattern resembles the bearish selloffs witnessed in December 2021 and January 2022. The declining EMV indicator, coupled with a vacuum of buyers, raises concerns about the future price trajectory of Nvidia.

While the AI investment psychology surrounding Nvidia has been hailed as a lucrative opportunity, history shows that overenthusiasm and market dynamics can change rapidly. Three years ago, Nvidia experienced a surge in demand driven by a shortage of high-end gaming chips and increased crypto-mining usage during the pandemic. Today, a similar storyline is playing out, albeit with different circumstances.

As the stock market braces for a potential correction or crash in late 2024, investors in Nvidia must closely monitor these market indicators and hope for another round of positive news to reverse the current slump. The future of Nvidia's AI boom hangs in the balance as it navigates a changing market landscape, testing the resilience of this technology giant.

Disclaimer: The above analysis is based on market indicators and charts provided by the author. It is important to conduct thorough research and consult with a financial advisor before making investment decisions.