Recently, staring at the market charts for days has made my eyes sore, but I unexpectedly discovered something different—the fluctuations in copper prices within the commodities sector might be signaling an impending shock to the crypto market.

As someone who has followed the linkage between commodities and the crypto world for years, I have to say: the vast majority of traders have missed this critical signal. This is not based on guesswork but derived from solid evidence in the physical market.

Let's look at the most key figures first. The LME's copper inventory is currently about 145,000 tons. At first glance, that seems like a lot, but a quick calculation makes it clear—global refined copper consumption is close to 28.6 million tons annually, which translates to over 70,000 tons per day. This means the existing stockpile can only cover less than two days of demand, and a supply chain disruption is just one trigger away.

Even more concerning is the surge in "canceled margin" data in the market. Simply put, it’s like the physical inventory piled up in exchanges suddenly being withdrawn on a large scale, with withdrawal speeds far exceeding replenishment. This is a textbook replay of the 2022 London Nickel crisis—back then, short sellers couldn’t deliver the physical, leading to exchange halts and forced order cancellations, wiping out both longs and shorts. The signs currently shown in the copper market are almost identical to those early indicators of that event.

The logical chain is clear: inventory hits bottom → large-scale withdrawal of physicals → delivery pressure skyrockets → market liquidity dries up → systemic risk erupts. The correlation between the crypto market and commodities is much stronger than many people imagine.