Silver Prices Collapse as the Market Shifts Phase

According to media reports, the silver market has experienced its largest price drop since 1980.

Notably, it is difficult to identify a single powerful fundamental catalyst that could clearly explain the move from the 29 January high near $120 to today’s low around $72 (approximately −40%). The geopolitical backdrop remains tense, with risks related to Iran, Greenland, Ukraine and other regions still very much in play.

The media point to a cascade of long-position liquidations, a view that aligns with the analytical conclusions of our article “For the First Time In History, the Price of Silver Has Exceeded $115”, published five days ago.

At that time, we:
→ reaffirmed the primary ascending channel and highlighted a surge in volatility during the A→B move from the upper boundary of the channel;
→ suggested that “smart money” was using broad market participation to lock in profits on long positions after an extraordinary rally (more than +200% over the past six months). In Wyckoff terms, this corresponded to a distribution phase.

These assumptions were subsequently confirmed by:
→ a brief push above the A high (the UTAD pattern — Upthrust After Distribution);
→ a sharp increase in bearish pressure. As a result, around the turn of the week, XAG/USD decisively broke not only the channel median but also its lower boundary.

Within the framework of Wyckoff methodology, this price action in silver can be interpreted as follows:
→ “smart money” has completed the distribution of long positions and shifted to selling into the market;
→ retail traders’ positions are being liquidated en masse, accelerating the decline.

In other words, following the Distribution phase, the market has entered the Mark-Down phase. The speed and violence of recent price moves — making timely decision-making particularly difficult — further support this interpretation.

Therefore, even if silver attempts a rebound under the current conditions of extreme oversoldness, any recovery is likely to face a strong resistance zone in the $87.5–95 area. This is where bears previously held a clear advantage while breaking the long-term ascending channel.

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