MERL Rallies 16% on Liquidity Inflow Amid Bitcoin Calm, Pullback Risks Emerge

• MERL’s perpetual open interest climbed to $75.79 million, up $27 million in one day, reflecting heightened market liquidity and bullish sentiment.

• Spot market accumulation continues, with $700,000 in net outflows from exchanges, limiting supply as investors build positions.

• The taker buy/sell ratio stands at 1.05, indicating buy orders dominate volume, though the accumulation/distribution indicator remains negative, hinting at lingering selling pressure.

Discover the MERL price surge: 16% gain driven by liquidity boom and holder growth to 173,800. Explore on-chain metrics and risks for Bitcoin layer-2 investors. Stay updated on crypto trends today!

What is driving the MERL price surge?

MERL price surge stems primarily from a significant liquidity influx in the derivatives market, where perpetual open interest reached a record $75.79 million. This 16% rally occurs as on-chain activity rises, with token holders increasing to 173,800, even while Bitcoin trades in a narrow range. Spot investors’ accumulation further supports this upward momentum by reducing available supply on exchanges.

How does increasing open interest signal bullish momentum for MERL?

Open interest in MERL perpetual contracts expanded by approximately $27 million in a single day, underscoring robust market participation. This metric, tracked by platforms like CoinGlass, measures the total value of outstanding derivatives and points to growing liquidity. Data shows long positions outpacing shorts, fostering positive sentiment. According to market analysts from sources such as CoinGlass, such expansions often precede sustained price gains, though they can also amplify volatility if sentiment shifts. The taker buy/sell ratio of 1.05 confirms that aggressive buying drives trading volume, reinforcing short-term bullish pressure on the MERL price.

Merlin Chain [MERL], the Bitcoin [BTC] layer-2 solution, has recorded a notable increase in on-chain activity over the past day. The asset rallied sharply, gaining 16% at press time, while the number of token holders climbed to 173,800. Although performance appears decisively bullish, signs of a potential price pullback still loom within the broader market structure.

Liquidity boom lifts price

The recent surge in MERL price can be largely attributed to a sharp liquidity inflow across the derivatives market.

MERL perpetual Open Interest (OI), a metric that reflects the total value of outstanding derivative contracts and overall market liquidity, has climbed to a new all-time high of $75.79 million, as of writing.

Notably, this spike highlights the bullish sentiment currently circulating in the market. OI reached this level after expanding by approximately $27 million within a single day.

Source: CoinGlass

Such a large one-day inflow typically includes positions from both long and short traders. In this instance, trading data indicates that long positions dominate market activity.

Trading volume has also turned decisively positive, with the taker Buy/Sell Ratio reaching 1.05. This reading suggests that taker buy orders are leading cumulative volume, reinforcing short-term bullish pressure.

Spot investors step in

Spot market participants have also continued to accumulate MERL, helping to restrict available supply.

In context, exchange outflows remain relatively modest, with roughly $700,000 worth of MERL withdrawn from centralized platforms over the past day.

On its own, this level of outflow does not strongly confirm a bullish market structure, as the amount remains comparatively small.

However, sustained accumulation alongside consistent net outflows increases the likelihood that MERL maintains its upward trajectory, as bullish investors view current levels as an attractive entry point.

Source: TradingView

Notably, the accumulation/distribution indicator has ticked higher, pointing to stronger buying pressure relative to selling. That said, the indicator remains in negative territory.

This negative reading suggests that recent buying has yet to fully offset the heavier selling pressure observed over the past week, which contributed to the prior decline.

Risk of a pullback?

Despite recent gains, MERL still shows downside risk, as indicated by the liquidation heatmap.

This tool highlights liquidity concentrations above and below the current price to signal potential moves. Liquidity positioned above often draws prices upward, while clusters below suggest possible declines as the market moves to fill those levels.

Source: CoinGlass

Currently, MERL’s rally has pushed the price higher, clearing major liquidity zones above. As a result, most liquidity clusters now sit below the current trading range.

Based on classical market behaviour, this setup increases the possibility of a short-term pullback. However, such outcomes are not guaranteed.

One key exception emerges when bullish momentum continues to strengthen, allowing price to defy typical liquidity-driven retracements. Insights from TradingView analyses emphasize that while downside liquidity poses risks, ongoing accumulation could mitigate pullbacks.

Frequently Asked Questions

What factors are contributing to the recent MERL token holder growth?

The increase to 173,800 holders reflects heightened interest in Merlin Chain’s Bitcoin layer-2 capabilities. This growth aligns with the 16% price gain and rising on-chain activity, as investors accumulate amid stable Bitcoin prices. Data from exchange flows shows modest outflows, supporting long-term holding trends without speculative excess.

Is the MERL price sustainable after this liquidity spike?

Yes, the open interest surge to $75.79 million and positive buy/sell ratio suggest short-term sustainability, but watch for pullbacks due to lower liquidity clusters. Spot accumulation adds stability, yet the negative accumulation indicator indicates some unresolved selling pressure from recent weeks.

Key Takeaways

• Liquidity Inflow Dominates: MERL’s open interest hit $75.79 million, with $27 million added in one day, driving the 16% rally through dominant long positions.
• Accumulation Builds Supply Pressure: Exchange outflows of $700,000 and rising holders to 173,800 restrict supply, though the indicator lags in positive territory.
• Pullback Risks Persist: Liquidation heatmap reveals clusters below current prices, potentially triggering volatility; monitor momentum for sustained upside.

Conclusion

The MERL price surge highlights Merlin Chain’s growing role in Bitcoin’s layer-2 ecosystem, fueled by liquidity booms and spot accumulation despite potential pullback signals from heatmaps and indicators. As on-chain activity intensifies, investors should track open interest and holder metrics for ongoing trends. With Bitcoin’s range-bound trading, MERL offers a compelling watch for diversification opportunities in 2025.