2026-01-20 08:33:52

MERL recently experienced a volume breakout to the downside, with a single-day decline approaching 20%. However, what truly warrants attention is the underlying position structure—high open interest combined with a sharp plunge, which is a typical sign of systematic liquidation of long leverage.

From the market perspective, this decline shows no resistance. There is no obvious buying support, and each rebound quickly turns into a new selling pressure zone. Technically, there is a lack of effective support below the current price level, and the downward momentum is still in the process of being released.

**Trading Strategy:**
The least resistance is in the short position. Entry range is between 0.170-0.175, with a strict stop-loss set at 0.185. The targets are divided into two levels: the first target at 0.155, and the second at 0.140.

Following the trend is the core logic in this type of market. When a systematic liquidation signal clearly appears, reverse trading is often the riskiest choice. Under the current pattern, it is more prudent to wait for a full correction before considering building a long position.

MERL-10,54%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

7 Likes

Reward
7
4
Repost
Share

Comment

0/400

GmGnSleeper

· 8h ago

The smell of leveraged liquidation, longs have to pay the tuition again --- This wave of systemic clearing is indeed unavoidable, buying orders have disappeared directly --- Rebound then crash, a typical short-term celebration, following the trend is the way to go --- Can 0.140 hold? It's still a question, it feels like it needs to break further --- Longs are now a hot potato, consider rebounding before making a move --- Falling without resistance is the most terrifying, indicating that no one is really bullish anymore --- I’ve learned this move, going with the trend loses half as much as fighting against it --- The analysis of the position structure is reasonable, high leverage at high levels is a powder keg --- Isn’t it better to go short after a reversal? Why stubbornly hold onto longs --- Having broken through to this extent, those hoping to catch the bottom are just waiting to die

View OriginalReply0

BearMarketBard

· 8h ago

It's another story of leverage being wiped out. The bulls are really in trouble this time. The bulls are waiting here for a rebound, but every rebound turns into a distribution zone. LOL. Can 0.140 hold? It feels like it could drop even further. This move with the trend to short isn't risky, just worried about getting slapped in the face if the trend reverses. When will I be able to bottom fish? The wait is exhausting.

View OriginalReply0

SlowLearnerWang

· 8h ago

It's another time when I react slowly; it only dropped 20% before I saw this analysis... To put it simply, the bulls have been shaken out. I definitely did the opposite again this time.

View OriginalReply0

ProveMyZK

· 8h ago

The bulls have been crushed again. This wave of leverage liquidations probably made the shorts very happy. --- Entering short at 0.170 looks okay, just worried about a sudden rebound and sharp comeback. --- The most feared thing is a decline without resistance; it feels like there's no bottom to be found. --- Wait for a pullback to go long again. This pace is too fierce. --- Systematic clearing... sounds exciting, luckily I didn't chase the high. --- A rebound instantly turns into selling pressure, a typical fake-out. I'm choosing to wait and see. --- The target of 0.14 feels uncertain; a drop to 0.155 would be good. --- The bulls are bleeding; short sellers must be having a blast. --- Who dares to buy the dip in this market is just handing over money.

View OriginalReply0