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The Merlin Chain Project (MERL) is a second-layer Bitcoin project designed to enable faster and cheaper operations on the Bitcoin network. The token is up about 22.5% in the last 24 hours and is trading near $0.31. More than three months, the price of Merlin Chen is still on 171%. But last month tells a different story. In that period, Merle is down about 15%, even after the recent rally.
The question is simple. Did this sharp move reinforce the trend, or was it more of an anomaly? The charts indicate that the 24-hour bull only reinforced his trend reversal theory. And not in a good way!
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The rally looks strong, but the fundamental signals are not
It started earlier in Merlin Chen’s long uptrend, starting towards the end of June, the price and the Relative Strength Index (RSI) moved together. The RSI measures buying and selling strength, and the high and high prices of the RSI have continued to rise. This is how a healthy altitude behaves.
Last month broke this pattern. Between October 26 and November 26, the price of Merlin Chen made a higher high. The RSI produced a lower high. This is a standard bearish divergence. It often appears near the end of an uptrend, indicating that the next phase may be headed lower.
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Adding more pressure is the Chaikin Money Flow (CMF) indicator, which tracks se Big buyers supported the move.
From September 21 to November 26, Merle’s price went higher again. The CMF has produced lower highs and has now fallen below the zero line. The drop below zero, while forming a bearish divergence against the price, means that the big money flows have weakened even as the chart is pushed to new highs.
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A 22% increase did not solve this. In fact, the candle that came after the jump turned red, indicating that sellers took advantage of the force to exit instead of joining. When the RSI and CMF weaken as prices reach new highs, this pattern often suggests a bull trap – a quick move higher that attracts buyers. Before the trend reverses.
Main points of the article: the price level of Merlin Series now decides whether the uptrend will continue
Now decide the price levels of the series The current Merlin everything
The first major resistance reaches $0.38. If the daily price successfully closes above $0.38, the divergence pattern fades and will push MERL to target $0.48 and then $0.57, the highest in a short time. This would be a sign that the broader rally since June is still in place. However, the movement will still need CMF support.
If MERL fails to cross $0.38 and falls below $0.28, the reversal pattern will become stronger. The line that confirms the downtrend is located near $0.21. A daily close below $0.21 would complete a clear top and turn the entire three-month structure into confirmation of a trend reversal.
The message is now clear. MERL’s 22% rise saved the chart in the short term, but also revealed that momentum and demand from large portfolios is slipping away. If the key levels fail, this growth will not be remembered as a breakthrough, but as a move that confirmed the beginning of a downtrend. It could also be a “bull trap” for those who entered at $0.57 or nearby levels.
