I wrote an article on January 26, 2026, titled “Silver is flashing a 1980s warning: Is a $125 rally or a 72% crash coming next?”
Feelings were strong at that time. Targets were brave. Dreams were very loud.
Today, the real world is calmer and more serious. Silver fell almost 47% from its high of $121 on COMEX to $64. The metal hit a record high of Rs 4,20,000 per kg on MCX in India, but then fell to Rs 2,34,000, a drop of about 44%.
With the ongoing war between Iran and Israel, the gold is glittering, but can Silver resume the bullish momentum?
Or is the next stop on the way down $50?
First, honour the past. Silver has made some big moves in the past. After a huge rally in the 1980s, silver fell almost 72% from its high. If we use that historical standard to look at the recent high of $121, a 72% drop would bring the price down to about $35.
I don’t think $35 is going to happen so early. But history shows us that silver doesn’t correct politely. Markets go through cycles of excitement, happiness, distribution, and then decline. The structure right now suggests that the euphoria phase has ended and distribution has begun.
The first warning sign on the COMEX silver monthly chart
When I look at a market, I like to start from the top and work my way down. Look at the big picture first.
The RSI (Relative Strength Index) on the monthly chart of COMEX Silver went down right after the $121 high.
RSI tells you how fast the trend is. It is clear that the bullish momentum has weakened when it drops from high levels.
Imagine a car going up a hill. If the engine loses power, the car may still move forward for a while, but it will be hard to climb.
It’s not a small sign that the monthly RSI is going down. It tells us that the main trend may have changed from bullish to bearish. And the primary trend defines the long-term trend.
COMEX Silver daily chart: The rally in the trap
Silver fell sharply from $121 to $64, then rose sharply to $96 during times of geopolitical unrest. A lot of traders thought the bottom had formed. This is where knowing how to do technical analysis can help you potentially save money.
In a bear market, bounces don’t mean the market is going up; they mean you should sell. This is what happened on a technical level:
- The drop from $121 to $64 caused a bounce back to about $93–$96.
- This level was close to the 50% Fibonacci retracement level.
- The price also fell below a line that was going up.
- Fibonacci retracement simply helps beginners understand the extent of a price drop’s recovery. Prices often go back up 38% to 50% before falling again in strong downtrends.
- The rejection in the $93–$96 range was not strong. It was the return of supply.
This makes it more likely that silver may dip to $50 in the next few months
MCX Silver daily chart
The bull trap: Why recent bounces are selling opportunities
Silver fell to Rs 2,34,000, but then it went back up to Rs 3,00,000. The bounce came to an end close to the 38.2% Fibonacci retracement. With multiple rejections at Rs 3,00,000, it shows that sellers are looking for an opportunity to create a supply at higher levels. If a market can’t break through a psychological level again and again, it means that buyers aren’t sure.
MCX outlook: Will Silver hit Rs 1,50,000?
If COMEX Silver falls to $50, the price of MCX silver could probably fall to Rs 1,50,000 per kg. When a market can’t break through a psychological level over and over again, it means that buyers aren’t sure what they want. Yes, that sounds scary. But comfort doesn’t make the markets move. They move because of their structure.
What happened to the dreams of Rs 5,00,000?
Targets of Rs 5,00,000 per kg were common just a few months ago. When silver hit Rs 4,20,000, everyone was hopeful. But the markets don’t like too much optimism. This isn’t the first time. It won’t be the last.
What should investors and traders do?
Let’s be realistic.
- Don’t go bottom fishing or trying to catch falling knives; it wastes money.
- Wait for confirmation until the RSI goes up on the weekly and monthly charts.
- Daily chart shows higher highs and higher lows.
- Break through important levels of resistance of Rs 3,10,000.
- Use Position Sizing – If you are putting money into silver ETFs or silver coins, avoid it.
- Traders can short during rallies, but they need to set strict stop-losses.
Investors should look for structural strength, not headlines.
The emotional story is slowing down right now, even during the war. The technical structure is weak because prediction is exciting in markets. And trading is equally difficult during the volatile times of war.
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Brijesh Bhatia is an Independent Research Analyst and is engaged in offering research and recommendation services with SEBI RA Number – INH000022075. He has two decades of experience in India’s financial markets as a trader and technical analyst.
Disclosure: The writer and his dependents do not hold the stocks discussed here.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authoRs Investors must make their own investment decisions based on their specific objectives and resources, and only after consulting such independent advisors if necessary.