KEY TAKEAWAYS
Merlin Chain underwent an infrastructure upgrade to improve its scalability on Nov. 26.
The Merlin Chain (MERL) price pumped today but has crashed in the last few hours.
Is the Merlin Chain price increase just a pump and dump scheme, or will it continue this week?
Merlin Chain is suddenly back on traders’ radar after MERL doubled in price today, igniting the question: Why is Merlin Chain going up?
The spike follows a major network upgrade aimed at improving scalability and clearing long-standing performance bottlenecks.
Now, after MERL’s first breakout attempt failed earlier this month, traders are trying to figure out whether this rally has real momentum—or if another sharp reversal is waiting in the wings.
Why Is Merlin Chain Going Up?
Merlin Chain has been steadily climbing since its lows in June.
Its rally accelerated once the price broke out from a diagonal resistance trend line in September.
The breakout was significant since it confirmed that the previous correction had ended.
Shortly after the breakout, MERL struggled with the $0.45 horizontal resistance area.
This all changed today, as the Merlin Chain price surged once more, finally moving above the resistance.
However, things aren’t perfect just yet.
The resistance is evident in the weekly time frame, and MERL has not yet closed above the $0.45 area.
Until it does, the possibility remains that the rally will be just a failed breakout attempt.
Is Weakness Brewing Underneath?
Things get messier when looking at momentum indicators.
The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have created bearish divergences.
These divergences are a sign of weakness, indicating that they reduce the likelihood of a breakout.
Outside of the MERL price action, some users are concerned about concentrated supply.
More specifically, a single wallet holds nearly 50% of the total supply, meaning that a sell-off could cause the price to drop significantly.
Short-Term Breakdown
Merlin Chain’s hourly chart is starting to tilt bearish.
This is because the price broke down from an ascending support trend line that had been in place since the rally accelerated.
The breakdown triggered a MERL price crash that is still ongoing.
It is possible that the crash occurred as a result of the large wallet sale.
Hence, traders should exercise caution when interacting with Merlin Chain, as coordinated selling could lead to a sharp price crash.
Where Merlin Chain Goes Next
Despite the hype surrounding the upgrade and breakout, Merlin Chain trades at a precarious position.
A weekly close above $0.45 would validate the bullish structure and open the door for higher targets.
But weakening momentum, a short-term breakdown, and a concentrated supply pool raise the risk of a sudden reversal.
