Silver Price Forecast: 18% Plunge Threatens Long-Term Bullish Structure

Silver faces a critical technical breakdown as a sharp sell-off breaches key support levels, raising the risk of a bearish trend reversal.

Silver prices experienced a steep correction after breaking down from a rising wedge pattern last Thursday, plunging by over 18% in just six days. The metal reached an intraday low of $28.32 on Monday, down from the recent swing high of $34.58, shaking the confidence of bulls and testing key technical structures.

Technical Breakdown: Trend Reversal in Focus

This drop has undercut the important $28.75 swing low from December, a level that previously supported silver’s bullish trend structure of higher highs and higher lows. Although this breach suggests a potential trend reversal, the move is not yet confirmed unless silver closes below $28.75 on the daily chart.

During this dramatic slide, silver broke through several major support levels:

• 20-Day Moving Average (MA) – breached last Thursday
• 50-Day MA – broken swiftly afterward
• 200-Day MA – lost in Monday’s trading
• Two key uptrend lines from the 2023 and early 2024 rallies

With all these supports falling in quick succession, the spotlight now turns to the next lower trendline from the broader parallel trend channel that began forming in 2022.

Volatility Surge Signals More Downside Risk

Silver’s latest pullback marks its lowest price in over 30 weeks, increasing market volatility and signaling a shift in momentum. Whether or not the lower boundary of the long-term channel is tested, the spike in volatility indicates that further downside cannot be ruled out.

That said, if silver stages a recovery rally from current levels, resistance is expected to form quickly, particularly around the 200-Day MA at $30.89, which also aligns closely with the $30.81 previous swing low—now flipped into a potential resistance zone.

Fibonacci Support in Play

Silver found initial support near the 78.6% Fibonacci retracement level at $28.21, and this coincides with Monday’s low. This confluence may trigger a short-term rebound, but bulls face a tough road ahead.

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Key Levels to Watch:

• Immediate Resistance: $30.81 – $30.89 (prior swing low and 200-Day MA)
• Critical Support: $28.21 (Fibonacci), followed by $27.50 and $26.90 trendline supports
• Bearish Confirmation: Daily close below $28.75
• Next Target if Breakdown Continues: $26.50 zone (trend channel base)

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Outlook: The silver market’s sharp drop has shaken its bullish footing. While short-term rebounds are possible, technical signals now favor caution. Traders should closely monitor the $28.75 support and $30.89 resistance to gauge the next decisive move.

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