The scene in the trading hall a few days ago left a deep impression—Old Wang next door was pounding his thigh and shouting, "Silver has hit a new high again!" Many precious metal investors around were cheering and celebrating. But as I watched this wave of market movement, I had a slightly different thought in my mind.

As an analyst who has been involved in the crypto market for many years, I am quite sensitive to the rhythm of such market rotations. When the rise of precious metals like silver, palladium, and platinum is mainly driven by short sellers being forced to buy back, it usually means the market comes quickly and goes just as fast. The current reality is that this "short squeeze frenzy" in precious metals is almost over. And the truly smart money? They have already begun quietly positioning themselves in Bitcoin and Ethereum.

**How did the madness in silver come about**

Recently, the precious metals market has indeed been lively. Silver broke through $50 per ounce, and platinum and palladium also followed suit. It sounds like the fundamentals are strong, right? But things are not that simple.

The London silver market is now caught in a liquidity crunch. The freely tradable silver inventory has dropped by 75% compared to 2019, yet the daily trading volume reaches as high as 250 million ounces—just look at how big this contrast is. Physical silver is simply not enough, but trading volume continues to expand, creating a hotbed for short sellers being forced.

Even more outrageous, traders, in order to ease the pressure in the London market, have forcibly paid a $1 per ounce air freight fee to transport silver from New York to London. This created the largest single-day withdrawal record in over four years. The overnight leasing rate for silver once soared to a historic high of 200%—what does this indicate? It shows how crazy the market's demand for physical silver is.

So, this price increase, to put it plainly, is a passive rise. Short sellers are being forced to buy back to push prices higher, rather than a resilient rally driven by fundamentals. Once the squeeze eases, the momentum of this market will significantly weaken.

What are smart funds doing now? They have already started focusing on opportunities in Bitcoin and Ethereum.