Silver Just Hit $89, But The Charts Are Hiding A Catch

What Happened

The metal trades near $86.94 today and holds inside an ascending parallel channel. Meanwhile, RSI and MACD readings on the 4H timeframe hint at fading short-term momentum.

Macro Forces Behind Silver’s Latest Move

Alexander Potavin, analyst at Finam Group, recently shared his macro view with BeInCrypto.

Market Context

Silver (XAG) price reached $89 yesterday after breaking out from a descending triangle on May 7. However, four-hour indicators now warn of a possible pullback toward $79 before any further upside.

Silver’s price action reflects a mix of macroeconomic conditions, industrial demand, and supply constraints rather than any single driver. Earlier BeInCrypto coverage on the path toward $100 detailed how supply stress and physical demand keep supporting the metal.

“Silver prices are influenced by both general macroeconomic factors and trends in the real sector: industrial demand, limited supply, and the overall market sentiment regarding interest rates. Silver may rise when monetary policy is eased (interest rate cuts) if this stimulates economic activity, but it reacts more strongly to economic downturns and recessions.”

Silver broke out from a descending triangle on May 7 on the daily chart. Price then pushed straight into the 0.382 Fibonacci retracement near $89.

Meanwhile, the BBWP volatility indicator has printed red high-volatility readings. That print often signals an approaching directional decision.

Despite the bullish daily breakout, the four-hour chart has a catch. Price has trended inside a parallel ascending channel since May 4.

A breakdown from the channel would likely send the price toward the 0.5 Fibonacci retracement near $79. That level also aligns with the daily support scenario described above.

Why It Matters

His comments explain why breakouts on silver charts often arrive alongside shifts in rate expectations or industrial activity signals. Traders, therefore, watch both chart patterns and macro flows when positioning near critical Fibonacci levels.

Two scenarios now emerge. A controlled pullback to the 0.5 Fibonacci retracement at $79 would reset momentum. The level could then confirm support before another leg higher.

A previous BeInCrypto analysis flagged the same triangle from the bearish side earlier in May. Yesterday’s move resolved it to the upside.

At the same time, the MACD histogram has turned red and is sloping lower. That setup suggests fading buying pressure across the short-term timeframe.

RSI divergence on the same timeframe already signals weakening upside momentum. Above current levels, Remdocan sees the $96 region as the main decision point.

Daily closes above that mark could open the door toward the prior peak zone. Rejection there would invite another correction.

Details

Daily Chart Confirms Bullish Breakout at $89

Yesterday’s session marked the first tag of that resistance since February. The relative strength index (RSI) sits in bullish territory close to 70, which keeps momentum aligned with the broader uptrend.

Alternatively, a clean break above $89 would open the next resistance zone. That target sits at the 0.236 Fibonacci level near $101.

Four-Hour Chart Hints at a Near-Term Correction

It now hovers near the lower boundary, but no clean breakdown has occurred yet. The 4H RSI broke down from its ascending trendline yesterday and slipped into neutral territory.

Analyst @remdocan Points to $96 as Key Decision Level

Independent technical analyst @remdocan offered a similar four-hour read on X, adding several layers of confluence. According to the analyst, the 83.052 swing low is the key level holding the short-term uptrend.

To the downside, the analyst flagged $83 as the line that defines the trend. A break below it would expose the 70 to 65 zone, described as a strong Fibonacci and psychological support band.