Did The 22% Merlin Chain (MERL) Price Rally Just Confirm A Bull Trap?
Despite a recent 22% spike, technical indicators suggest Merlin Chain's rally might be a bull trap signaling a potential downtrend.Summary
Merlin Chain (MERL), a Bitcoin Layer-2 project, recently experienced a 22.5% price rally, trading near $0.31, though it remains down 15% over the past month. Technical analysis suggests this rally may be a bull trap rather than a confirmation of the uptrend. Historically, MERL's price and Relative Strength Index (RSI) moved together, but recent data shows bearish divergence: the price made a higher high while the RSI made a lower high between October 26 and November 26. Furthermore, the Chaikin Money Flow (CMF) also showed lower highs and has dropped below the zero line, indicating weakening large-money inflows supporting the price surge. The immediate price levels are critical: clearing resistance at $0.38 could validate the broader uptrend, but failure to do so and a drop below $0.28, especially below the $0.21 confirmation line, would confirm a trend reversal, making the recent spike look like a trap for late buyers.
(Source：BeInCrypto)