On December 29th, spot silver experienced an extreme market event. It plummeted over $6 within 30 minutes, with an intraday range of $9, finally closing near $77, down 2.6% for the day. This volatility broke the recent consolidation pattern of silver, exposing long-standing risks such as liquidity traps, macroeconomic expectation reversals, and technical breakdowns all at once. The $77 level has now become a key point in determining the short-term trend.

Why did this happen? Actually, it wasn't just one reason, but three pressures exploding simultaneously:

First is the sudden disappearance of liquidity. With the New Year holiday approaching, market activity rapidly declined, and trading volume shrank by over 40%. In this "shallow" environment, even small sell orders could trigger automated liquidation by algorithms, creating a waterfall effect that drove prices away from normal levels.

Second is the abrupt shift in macro expectations. Previously, the market was optimistic about the Federal Reserve cutting rates in 2026, which was a major support for silver prices. But recent US core PCE data exceeded expectations, raising concerns about persistent inflation. Funds quickly reassessed the pace of rate cuts and hurried to close long positions in precious metals. Due to its commodity nature, silver was hit hardest.

Finally, technical chain reactions occurred. After the price broke below the $80 level, automatic stop-loss orders were triggered one after another, creating a downward spiral of selling. The combination of these three forces led to this unexpected flash crash.