Silver’s Peak and the Hook - What next?The recent price action in silver has offered a textbook example of market structure, wave dynamics, and sentiment shifts. Trading at $76.04 at the time of writing, silver recently surged to a high of $83.75 before entering a sharp retracement. This pullback, commonly referred to as a "hook," follows a strong impulsive rally and raises important questions about what comes next—reaccumulation for another leg up or the early signs of a broader correction.
On the 30-minute timeframe, silver’s rally began near $64.5 and progressed in a well-defined five-wave Elliott Wave impulse. Each wave respected the boundaries of an ascending price channel, demonstrating disciplined bullish structure. The final push in wave five lifted silver into a marked “Area of Interest” zone just below $84, where price overextended beyond the upper boundary of the channel. This breakout, while exciting, also showed signs of exhaustion, particularly when volume surged—a sign that often precedes profit-taking or distribution by institutional participants.
The rally from the low to the peak represented nearly a 30 percent move in a relatively short time. As price reached $83.75, buyers hesitated and sellers took control. What followed was the formation of the "hook"—a steep retracement to a low of $75.83. Although sharp, this retracement is not necessarily a sign of a bearish reversal. In market psychology, such hooks are common as traders take profits, stop orders are triggered, and sentiment briefly shifts from euphoria to fear.
The psychology behind this hook is a classic pattern. During the wave five surge, traders experience excitement and FOMO, which often draws in retail participation late in the move. As the rally stalls, early buyers take profits, leaving those who bought late with quick losses. This creates a wave of selling pressure. Smart money, having exited at the peak, may now be watching for re-entry zones closer to key Fibonacci levels or structural supports. If price holds and consolidates between $75 and $76 with reduced selling volume, a bounce could initiate the next bullish wave. However, if the $75.36 zone fails decisively, the correction may evolve into a deeper ABC structure, retracing further toward $73 or even testing the base of wave four around $70.
From a forward-looking perspective, two major scenarios are in play. The bullish case requires price to hold above the 0.618 retracement and reclaim levels above $78.50 to signal trend continuation. A breakout above this minor resistance would signal renewed demand and open the door to retesting the previous high and potentially setting a new one. The bearish case would be triggered if the price breaks below $75 with conviction, leading to a retest of deeper structure and possibly initiating a broader trend correction toward $70 or below.
