Silver price extends its corrective downside below the $28 mark, having clocked eight-year highs at $30.06, in light of the retail-trade frenzy spurred by Reddit.
- Silver price attempts a bounce but remains below the $28 mark.
- Silver price bears look to extend control after the 4% drop so far.
- Descending triangle breakdown on the 1H chart points to more losses.
Why is silver dropping in price?
Looking at it technically, after the recent rally, the bears have fought back control after the price confirmed a descending triangle breakdown on the hourly chart in early European trading.
An hourly closing below the critical cap at $28.16, which is the convergence of the 50-hourly moving average (HMA) and the triangle support, has paved the way for further declines.
Silver targets the upward-sloping 100-HMA at $26.90 where the bears can take a breather.
A breach of the latter would close out Monday’s bullish opening gap, with the 200-HMA level at $26.23 back on the sellers’ radar.
The Relative Strength Index (RSI) points south below the midline, backing the case for additional downside.
Alternatively, a sustained move above the powerful support now resistance at $28.16 is needed if the bulls attempt any recovery.
The next relevant upside barrier is seen around $28.55, the confluence of the triangle resistance and bearish 21-HMA.