Parabolic Moves Don’t Always End in Collapse — Silver ExplainedI’ve seen many analyses from my colleagues where 1980 and 2011 are used not as upside projections, but as collapse templates for silver.
The argument is simple and visually convincing: silver has already gone parabolic, therefore the next chapter must be a collapse similar to those historical episodes.
I understand the logic.
I don’t predict the future, and I can’t categorically deny that such an outcome is possible.
But here’s where I draw a clear line: similar-looking charts do not guarantee similar outcomes, especially when the underlying drivers are fundamentally different.
And in silver’s case, they are different.
Let’s be precise about what 1980 really was (and why it collapsed)
The 1980 silver collapse is often treated as a “natural law of parabolic moves”.
In reality, it was not a natural market outcome.
It was the direct consequence of extreme concentration and leverage, driven by the Hunt brothers.
What made 1980 fragile by design
- The Hunts accumulated an extraordinary share of the global silver supply, both physical and paper.
- They used massive leverage in a relatively small and illiquid market.
- The price did not rise because global demand structurally changed — it rose because supply was artificially constrained.
- Once exchanges changed the rules (margin hikes, liquidation-only trading), the entire structure collapsed under its own weight.
This is critical:
The collapse of 1980 was not caused by silver being “too expensive”.
It was caused by the system forcibly unwinding a concentrated position.
So when someone says “this looks like 1980”, the real question is:
- Where is today’s equivalent of that concentration?
- Who controls 30–40% of deliverable supply?
- What single entity is forced to liquidate?
If that element is missing, then the collapse logic weakens dramatically.
2011: parabolic, yes — structurally unstable, also yes
2011 is a more honest comparison, and this is where many collapse arguments focus.
Silver:
- rallied aggressively,
- became a retail darling,
- and eventually collapsed hard.
But again, the reason it collapsed matters.
Why 2011 unraveled
- The rally was dominated by financial demand, not structural necessity.
- ETFs, leverage, and macro fear created fast money flows.
- When liquidity tightened and risk appetite faded, demand evaporated quickly.
- There was no structural constraint on supply forcing price stability.
In other words:
- 2011 collapsed because demand was reversible.
- Once sentiment flipped, there was nothing underneath to slow the fall.
Now comes the disagreement: why I don’t expect a 1980/2011-style collapse this time
Yes — I fully agree on one thing: extreme volatility is coming, or is already here (yes, more extreme than we've seen!)
Silver doesn’t trend quietly. It never has.
But volatility and collapse are not the same thing.
The key difference today: the type of demand
Today’s silver market is not driven solely by:
- fear,
- speculation,
- or monetary narratives.
A large and growing portion of demand is industrial and strategic:
- electrification,
- energy transition,
- technology infrastructure.
That demand:
- doesn’t disappear overnight,
- doesn’t panic-sell because RSI is overbought,
- and doesn’t care about chart symmetry.
This changes the downside dynamics.
Supply cannot respond the way people assume
Another overlooked point:
- most silver production is a by-product of other metals.
- higher prices do not instantly bring new supply online.
In 1980 and 2011, supply dynamics were not a binding constraint.
Today, they are.
That doesn’t mean price can’t drop — it means drops are more likely to be violent corrections, not structural collapses.
About the “parabolic = must collapse” logic
This is where I respectfully disagree with many analysts.
A parabolic move tells you:
- volatility is increasing,
- positioning is crowded,
- risk management becomes essential.
It does not automatically tell you:
- the entire move must fully retrace,
- or that price discovery was fake.
Markets can:
- correct through time instead of price,
- form wide ranges,
- or retrace partially and rebase.
History offers multiple outcomes, not a single script.
My base case (clear and unemotional)
- Yes, I expect extreme swings.
- Yes, I expect sharp pullbacks that will scare most participants.
- No, I do not see a clear mechanism today for a 1980-style forced collapse.
- And unlike 2011, I don’t believe demand disappears just because momentum cools.
This is not optimism.
It’s structure-based reasoning.
Trading perspective (grounded)
Because I expect volatility:
- I don’t chase vertical candles.
- I respect levels, not narratives.
- I scale, I take partial profits, and I allow room for noise.
- I treat silver as a dangerous instrument, not a lottery ticket.
Being right about direction is useless if volatility kicks you out first.
Final thought
My colleagues may be right — markets can always surprise.
But assuming collapse just because the chart looks familiar is lazy analysis.
1980 collapsed because of forced concentration unwind.
2011 collapsed because of reversible financial demand.
Today, silver is volatile — not hollow.
And that distinction matters more than any historical overlay.
The market will decide.
My job is to respect risk, not marry analogies 🚀
Best of luck!
Mihai Iacob
