Rebound trading opportunities for MERL during the bear market fluctuations

In a bear market environment, most investors choose to wait or exit, but technical signals are quietly indicating a potential rebound. During recent declines, key technical indicators for MERL/USDT have started to show signs of overselling, providing a noteworthy opportunity for traders willing to take a contrarian position.

Technical Confirmation Under Oversold Signals

From multiple timeframes, although the daily chart remains in a downtrend, the 4-hour chart has begun to show bullish features. The most critical signal comes from the 15-minute Relative Strength Index (RSI), which has fallen into deep oversold territory at 35.55. In technical analysis, an RSI below 30 is typically considered extremely oversold, suggesting that upward pressure for a partial rebound is building. This divergence—weakness on the daily but oversold on the short-term—often creates opportunities for contrarian trades in a bear market.

Precise Entry and Stop-Loss Placement

Based on the current technical outlook, the suggested trading setup is as follows:

• Entry Zone: 0.062417 – 0.063403 (a tight entry window between these two prices)
• Stop-Loss: 0.059952 (a protective level below to manage risk)
• Target Prices:
  • First target: 0.065868
  • Second target: 0.066854
  • Third target: 0.068826

This setup aims to control individual trade risk through a tight entry zone, while the tiered profit targets allow traders to optimize risk-reward at different stages of the rebound.

Reversal and Traps: Market Divergence in a Bear Market

However, a core market debate exists: Is this a genuine reversal, or just a short-term dead cat bounce before deeper declines? In a bear market, this judgment is especially critical. The oversold RSI strongly suggests upward pressure, but caution is necessary—sometimes oversold conditions can lead to further declines. Therefore, strict stop-loss execution and phased position building are wiser than going all-in. This trading opportunity is not risk-free but an attempt to find probabilistic advantage within the bear market dilemma.