Silver Bull Trap
Friday silver touched $121+—stackers screamed “buy the dip!” Bought late Friday, piled in Monday, Tuesday. Today? COMEX right now- $69.20. Yes, down Apx 40+% in just a few days!
Silver Bull Trap
Lesson straight from The Gambler: you gotta know when to hold ‘em, know when to fold ‘em. A few cashed chips as the top wobbled; they’re up. The rest? Sitting on melted bars.
Silver Bull Trap
If the “Friday Massacre” was the first blow, today was the knockout punch. After a historic run that saw silver touch an unthinkable $121.78 per ounce just one week ago (Jan 29), the market has completely fractured.
We aren’t just looking at a price drop; we are looking at the most violent deleveraging event in the history of the COMEX.
The Numbers: A 40% Haircut in 7 Days
To put today’s move in perspective, you have to look at the “altitude sickness” silver developed at the end of January.
The Peak: $121.78 (Thursday, Jan 29).
The First Crash: On Friday, Jan 30, silver plunged 26% in a single session, closing around $85.
The “Dead Cat” Bounce: We saw a brief recovery toward $90 earlier this week, giving bulls a false sense of security.
Today’s Carnage (Feb 5): The floor fell out again. Silver dropped as much as 16% today, at one point hitting an intraday low of $73.57.
From its peak last Thursday to today’s lows, silver has surrendered nearly $48 per ounce—a staggering 40% decline in exactly one week.
Why the Second Wave hit today?
While last Friday was triggered by the Kevin Warsh Fed nomination and massive margin hikes, today’s follow-through was driven by “forced exits.”
The Margin Trap: The CME didn’t just hike margins once; they kept the pressure on. Traders who survived the Friday crash by adding capital were wiped out today as the “maintenance margin” became impossible to cover.
The “Safe Haven” Exit: With U.S.-Iran talks officially scheduled for tomorrow (Friday, Feb 6), the geopolitical risk premium that drove silver past $100 is evaporating.
The Dollar Juggernaut: The DXY (Dollar Index) is at a multi-year high. Investors are fleeing “everything” to hide in the Greenback, treating silver like a tech stock rather than a monetary asset.
Technical Trauma
The technical damage is severe. On the way up, $100 was the psychological barrier. On the way down, the market expected support at $85 and $80. When those levels shattered today, the algorithmic “sell” programs took over.
We saw reports of traders getting filled $5 to $10 below their stop-loss orders because the liquidity simply wasn’t there. It wasn’t a trade; it was a “market order” stampede for the exits.
Is there a Floor?
Despite the “paper” price on the COMEX looking like a disaster, the physical market is screaming. Backwardation remains extreme, and premiums on physical coins and bars haven’t dropped nearly as fast as the futures price.
History shows that moves this parabolic—both up and down—rarely end quietly. We are no longer trading fundamentals; we are trading liquidity.
With this level of tremendous, unprecedented volatility, the traditional rulebooks have effectively been thrown out the window. When a market can climb to nearly $122 and then lose 40% of its value in a single week, it moves beyond the realm of standard technical analysis and into something far more unpredictable. At this point, trying to pinpoint a definitive bottom or a “fair” price feels less like market strategy and more like a total crap shoot.
Disclaimer: This post is for informational and entertainment purposes only. It is not financial, investment, or legal advice. Precious metals prices are highly volatile and can change dramatically. Past performance does not predict future results. Always do your own research, consult a qualified financial advisor, and never invest more than you can afford to lose. The author is not responsible for any decisions based on this post.
Silver Bull Trap
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