In every historical bull market across all asset classes, there is a persistent temptation to peak.
Investors often seek validation by drawing parallels to famous contrarian calls, notably Michael Burry’s 2007 housing market warning.
This trend becomes more pronounced as prices accelerate and volatility increases, which is the current environment in the silver market.
Bitcoin to silver ratio
The ratio between bitcoin and silver currently stands near 780. It is now below the peak of 2017, when bitcoin reached $20,000, and is now close to the level seen in November 2022, when bitcoin bottomed near $15,500 as the ratio fell to around $700. Such convergence suggests that silver may be entering a more vulnerable phase relative to bitcoin.
Silver has risen almost 300% over the past year. On Monday, silver fell nearly 15% after rising a similar amount earlier in the session, briefly reaching highs near $117 an ounce before retreating to around $112.
Previous local highs for silver tended to cluster around the early part of the calendar year, with most occurring in the first half of the year. Notable examples include February 1974 and January 1980, which marked a clear drop to $47, February 1983, May 1987, February 1998, April 2004, May 2006, March 2008, and April 2011 at $50, which was also a declining phase.
This historical pattern raises a potential red flag for silver price action: if history repeats itself, the precious metal may have reached the peak of its cycle, or even peaked.
