Silver dropped to $61.44 on the five-hour chart, completing a bear flag breakdown below its key moving averages on heavy volume. The metal now trades close to the 61.8% Fibonacci retracement near $61.17, a level where late shorts risk a snapback rally.
The breakdown leaves sellers in control for now, but the setup carries growing risk of exhaustion among late shorts as price approaches a classic oversold zone.
Bear Flag Breakdown Confirms the Downtrend
Silver lost support at $63.50, confirmed by a bearish marubozu candle that completed the bear flag breakdown. The metal now trades below its SMA(200) at $65.54 and the SuperTrend level at $64.39, marking an entrenched downtrend on the five-hour chart. Momentum backs the bears too: the RSI reads 33.23, and price sits 4% below its 20-period moving average.
Bulls Watch the $61.17 Level for a Bounce
Volume spiked to 37.4K on the breakdown, signaling conviction behind the move. Yet with price sitting just above $61.17 — the 61.8% Fibonacci retracement and the lower Bollinger Band — late shorts risk a snapback rally. The $60.50-$61.17 zone stays primed for volatility.
Trade Setups Split Aggressive and Patient Bears
The setup lists an aggressive short entry at $61.48 with a stop at $63.95, targeting $59.50, $57.50 and $55.00 for risk-reward ratios of 2.06, 3.44 and 5.17. A conservative version enters at $62.50 with the same stop and targets, waiting for a corrective rally first. The $61.50-$63.00 range counts as a no-trade zone, where whipsaws look likely.
If Silver finds strong support at $61.17, a sharp bounce could squeeze premature shorts. The setup remains a bear flag continuation pattern, and breakdowns at major Fibonacci support zones often mark decision points — continuation looks likely if the break holds, while a failed break could trigger a violent reversal.
Source: Investing.com
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