Silver fell 17% in the past 24 hours, erasing a two-day rally as the metal struggled to find a floor following last week’s historic rout.
The move also sent gold and copper lower, extending a selloff that traders say was amplified by limited liquidity and heavy speculative positioning.
The new drop also appears on crypto rails. On Hyperliquid, one of the largest tokenized silver-related liquidation draws was a forced close of approximately $17.75 million in XYZ:SILVER, including approximately $16.82 million from long positions, according to trading data shared by market participants.
The lopsided unfolding fits the recent trend, with traders leaning into rebound bets only to be flushed when volatility rises again.
That’s exactly what hedge fund manager Michael Burry reported earlier this week.
Burry described a “collateral death spiral” dynamic, in which leverage builds as metals rise, then falling crypto collateral forces traders to sell tokenized metals to meet their margin. He pointed out that bitcoin losses could force institutions to liquidate their profitable positions in the metals.
In this type of band, the ranking of liquidations may seem reversed, with metal products briefly causing more damage than bitcoin itself.
Macro headlines don’t help. Markets are still digesting the political implications of Kevin Warsh’s nomination to head the Federal Reserve, while President Donald Trump has pushed back against suggestions that the Fed could become more hawkish.
Rate expectations are important for precious metals, but the most important factor right now is positioning and forced selling, not the clear macroeconomic bid that fueled last month’s rally.
