Silver: There might still be a long way to go in its decline.

Silver has fallen 2.6% since the market opened on Tuesday, to $26.4 an ounce. After an unsuccessful attempt to break above $30 an ounce on April 7, the downward trend in silver prices has been replaced by sideways consolidation, but without any significant rebound.

FxPro's senior analyst Alex Kuptsikevich pointed out: Tuesday's decline had a significant impact on the analysis of technology stocks. The sharp decrease from $27 marks the end of the correction mode, with prices falling below 61.8% of the gains since the end of February.

It will soon become clear whether the local resistance area between $25.0-$25.5 will become a support level. If not, we will face a series of negative scenarios.

On the daily timeframe, the formation of a "head and shoulders" reversal pattern with prices falling below the "neckline" has occurred. The realization of this pattern could bring silver prices back down to $24.4. However, this phenomenon seems to only encourage the bears.

This is not the first attempt of silver to break the $30 mark in 2020. If strong resistance is shown at this level, it might deter buyers, as they have never successfully breached this high like gold has.

From 2023 to 2024, the 200-week moving average has been an important anchor for silver, preventing prices from falling significantly over a long period. If this pattern continues, then the intensity of selling would reduce at levels below $23. However, in 2022, silver briefly fell below this curve by 10%, reflecting the risk of a decline to $21.3.

A more alarming scenario is that, if silver breaks below the 200-week average level, a large-scale unwinding of silver positions would occur, just as we saw in 2020 and 2013, when silver prices fell by more than 30% below the 200-week average level.