In each historic bull market throughout all asset courses, there’s a persistent temptation to name the highest.
Traders typically search for validation by drawing parallels to well-known contrarian calls, most notably Michael Burry’s housing market warning in 2007.
This tendency turns into extra pronounced as costs speed up and volatility will increase, which is at present the surroundings within the silver market.
Bitcoin to silver ratio
The bitcoin to silver ratio at present stands close to 780. That is now beneath the 2017 peak when bitcoin hit $20,000 and now near the extent seen in November 2022, when bitcoin bottomed close to $15,500 because the ratio fell to round 700. Such convergence suggests silver could also be getting into a extra weak section relative to bitcoin.
Silver has surged almost 300% over the previous yr. On Monday, silver fell nearly 15% after rising by an analogous quantity earlier within the session, briefly reaching highs close to $117 per ounce earlier than pulling again to round $112.
Earlier native tops in silver have tended to cluster across the early a part of the calendar yr, with most occurring within the first half of the yr. Notable examples embrace February 1974 and January 1980 which marked a transparent blow off prime at $47, February 1983, Might 1987, February 1998, April 2004, Might 2006, March 2008, and April 2011 at $50 which was additionally a blow off section.
This historic sample raises a possible pink flag on silver’s value motion, if historical past is repeating itself, the dear steel could have reached its cycle peak, or perhaps a blow off prime.