Silver price sentiment has deteriorated dramatically, but the bearish trade may now be getting crowded enough to create conditions for a big countertrend move.
The Kobeissi Letter points to silver’s three-month put-call skew, which has risen to around -3 points, its highest level since early July.
Kobeissi says the metric has increased by roughly 10 points over the past four weeks, which shows stronger demand for bearish silver positions.
Even more striking, the reading has been higher only about 2% of the time over the past 12 months.
That tells us positioning has moved toward an extreme.
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Kobeissi Says Investors Are Extremely Bearish on Silver
The options market is only one part of the story.
Kobeissi also notes that speculative investors, including hedge funds and CTAs, sold approximately $2.2 billion in silver futures over the three weeks ending October 13.
Their net long exposure has reportedly fallen to about $1.7 billion, the lowest level in at least two years.
For comparison, that positioning was around $8.5 billion in December 2025.
So the chart and positioning data point in the same direction: investors have aggressively reduced bullish exposure and increased bearish bets.
Kobeissi’s conclusion is straightforward: sentiment toward silver is now extremely bearish.
That does not automatically mean silver is ready to rally.
The short silver trade is becoming crowded. Silver’s 3-month silver put-call skew is up to -3 points, its highest level since early July. This metric measures the relative cost of put options to call options and is up +10 points over the last 4 weeks, signaling growing demand for bearish bets on silver prices. Over the last 12 months, this metric has been higher only 2% of the time. Meanwhile, speculative investors, including hedge funds and commodity trading advisers (CTAs), sold -$2.2 billion in silver futures over the 3 weeks ending October 13th. As a result, their net long positioning is down to just +$1.7 billion, the lowest in at least 2 years. For perspective, this metric stood at +$8.5 billion in December 2025. Investors are extremely bearish on silver.
— The Kobeissi Letter (@KobeissiLetter) October 24, 2026
But crowded positioning can become important because once a large part of the market is already positioned for lower prices, there may be fewer new sellers left to push the move.
If silver unexpectedly starts rising, shorts can also be forced to cover, adding additional buying pressure.
Read also: Here’s Why Gold and Silver Prices Are Getting Wrecked Right Now
Silver Price Chart Is Now Deeply Stretched
The four-hour silver chart I analyzed shows XAG/USD around $53.90 after falling from roughly $70 in late August.
The structure remains bearish.
Silver has produced a clear sequence of lower highs and lower lows, and the latest move has taken price below the $55 area that previously acted as support.
RSI is around 28.4, with its average near 34.
That puts silver in oversold territory.
This fits well with Kobeissi’s positioning data.
We now have two signs of an extended market at the same time: price momentum is deeply weak, and bearish positioning is becoming unusually crowded.
The first support area I would watch is roughly $53-$54.
If that region holds, a relief move toward $55-$56 becomes realistic.
Above there, $57-$58 would be the next important recovery zone.
The bearish scenario remains simple.
A decisive break below $53 could expose approximately $52, followed by the psychological $50 level.
Silver Price Prediction: Can Crowded Shorts Trigger a Bounce?
My base case is that silver is getting close to an area where a short-term rebound becomes likely, but there is not enough evidence yet to call a durable bottom.
| Scenario | Silver price outlook |
|---|---|
| Bullish rebound | Hold $53-$54 → $55-$56 → $57-$58 |
| Base case | $53-$56 consolidation |
| Bearish continuation | Lose $53 → $52 → $50 |
The interesting part is that the technical and positioning signals are now starting to align.
Silver is oversold on the four-hour chart, and Kobeissi’s data shows investors are already heavily positioned for more downside.
That makes chasing the selloff risky.
For now, $53 is the level I would watch most closely.
If buyers defend it and silver moves back above $55, the crowded short trade could become fuel for a stronger relief rally.
If $53 fails, however, sentiment alone will not save the market, and $50 could quickly become the next major target.
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