Silver prices may dip to the key level of $66, with bulls facing a test of a new low in 2026

Gate News, March 20 — The silver market has recently shown clear signs of weakening. Although options data indicate that market sentiment remains bullish, the price structure and demand signals have shifted to caution. Analysts suggest that if key support levels are broken, silver prices could drop to $66, potentially hitting lows not seen since 2026.

From a technical perspective, the spot price of silver (XAGUSD) has broken below the upward-sloping head and shoulders neckline, which is typically seen as a trend reversal signal. The corresponding downside target is near $66, implying a potential decline of about 20%. The current price remains under pressure, indicating that short-term market momentum is weak.

The futures market also signals bearishness. COMEX silver futures maintain a contango structure, with longer-dated prices above near-term prices, showing that traders are not rushing to establish long positions. This “lack of urgency” suggests insufficient demand to absorb selling pressure, further weakening the foundation for a rebound.

Demand-side changes are also critical. On one hand, the gold-silver ratio has risen above 65, reflecting capital flow into safe-haven assets like gold, which diminishes silver’s monetary appeal. On the other hand, industrial demand is cooling. Models based on solar energy-related demand show a significant slowdown in silver demand momentum, with the Z-value turning negative, indicating weakening industrial drivers.

However, the derivatives market has not fully turned bearish. Options data, represented by SLV, still show a dominance of bullish options, indicating some traders are betting on a rebound. But this mismatch between positions and fundamentals could trigger concentrated liquidations if prices continue to fall, amplifying downward volatility.

Regarding key levels, if silver cannot regain above $75, the market may further test the $71 support. A break below that could target $66 next, with extreme cases possibly reaching $63 or lower. In the short term, silver’s trajectory will depend on demand recovery and shifts in macro capital flows.