Did The 22% Merlin Chain (MERL) Price Rally Just Confirm A Bull Trap?
Merlin Chain (MERL) is a Bitcoin Layer-2 undertaking designed to allow quicker, cheaper transactions on the Bitcoin community. The token is up about 22.5% previously 24 hours and trades close to $0.31. Over three months, the Merlin Chain value continues to be up about 171%. But the previous month tells a unique story. In that window, MERL is down about 15%, even after the newest spike.
So the query is straightforward. Did this sharp transfer up strengthen the pattern, or was it extra of an outlier? The charts recommend that the 24-hour window rally solely strengthened its pattern reversal idea. And not in a great way!
Rally Looks Strong, But The Underlying Signals Do Not
Earlier in Merlin Chain’s lengthy uptrend, beginning round late June, the value and the Relative Strength Index (RSI) moved collectively. RSI measures shopping for and promoting power, and each the value highs and RSI highs saved rising. That is how a wholesome rally behaves.
The previous month breaks that sample. Between October 26 and November 26, the Merlin Chain value made a better high. RSI produced a decrease high. That is normal bearish divergence. It typically seems close to the top of an uptrend, signaling that the following leg might flip down.
Want extra token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.
Chaikin Money Flow (CMF), which tracks whether or not big buyers are supporting the move, provides extra stress.
From September 21 to November 26, the MERL value made greater highs once more. CMF made decrease highs and has now fallen below the zero line. A drop below zero, whereas forming bearish divergence in opposition to the value, means large-money inflows have weakened even whereas the chart pushed to new highs.
The 22% spike didn’t repair this. In truth, the candle proper after the soar turned purple, displaying that sellers used the power to exit as an alternative of becoming a member of. When each RSI and CMF weaken whereas value hits new highs, the setup typically hints at a bull entice — a quick transfer up that lures consumers in before the trend reverses.
Key Merlin Chain Price Levels Now Decide If The Uptrend Survives
Now, the existing Merlin Chain value ranges resolve all the pieces.
The first main resistance sits at $0.38. A clear every day shut above $0.38 would weaken the divergence setup and let MERL purpose for $0.48 after which $0.57, the near-term peak. That could be the sign that the broader rally from June nonetheless holds. However, the transfer would nonetheless want CMF help.
If MERL fails to clear $0.38 and falls below $0.28, the reversal setup grows stronger. The line that confirms the downtrend sits close to $0.21. A every day shut under $0.21 would full a transparent high and flip the entire three-month construction right into a confirmed pattern reversal.
Right now, the message is simple. MERL’s 22% rally saved the short-term chart, but it surely additionally revealed that momentum and big-wallet demand are fading. If the important thing ranges fail, this spike might be remembered not as a breakout, however because the transfer that confirmed the beginning of the downtrend. And it’d even appear like a “bull entice” for many who entered at $0.57 or close by ranges.
The put up Did The 22% Merlin Chain (MERL) Price Rally Just Confirm A Bull Trap? appeared first on BeInCrypto.
