MERL's Market Cap Approaches $1 Billion: Can a Buyback Mechanism Help It Break Through?
TL;DR
MERL's current market capitalization is approximately $345 million, and reaching $1 billion would require approximately a threefold increase. Officials have pledged to allocate over 50% of BTCFi's revenue to ongoing buybacks. Technically, MERL is showing signs of consolidation, but a break above the key resistance level of $0.383 is needed to confirm upward momentum.
Core Analysis
Current market performance
Price Data : MERL is currently trading at approximately $0.354, up 18.1% in the past 24 hours, demonstrating a degree of resilience. Coingecko has a market capitalization of $345.9 million, a circulating supply of 979 million, and a 24-hour trading volume of $63.05 million (up 146.3%). Over the past seven days, it has risen 2.8%, outperforming the broader market (down 4.3%), and has seen a 30-day gain of 93.9%.
Market Cap Progress : From approximately $40 million at launch in April 2024, MERL has grown approximately 8.6-fold to its current $345 million. To reach its $1 billion target, it will need to grow approximately 2.9-fold, corresponding to a price of around $1.02.
In-depth analysis of the repurchase mechanism
Buyback Commitment : Merlin Chain has officially announced that it will use over 50% of BTCFi's ecosystem revenue to continuously buy back MERL tokens. Bitget's revenue comes from staking rewards, liquidity provision fees, and multi-chain yield agreements. Buybacks are executed directly from the open market using a transparent decentralized oracle to reduce the circulating supply.
Implementation Status : The repurchase program has been in place since 2024 and is ongoing. While the specific repurchase amount of Chaincatcher has not been disclosed, the mechanism is described as "already in progress and continuously executed," helping to provide price support during market fluctuations.
On-chain data analysis
Protocol performance : Merlin Chain TVL was $50.3 million, down 41% from the previous month.
Token Flow : In September, whale accumulated 98.24 million MERL (worth $14.9 million), with no reports of significant sell-offs in October. The upcoming token unlock (approximately 35.65 million MERL, valued at approximately $12 million, on October 19th) may put pressure on prices.
Technical Analysis
| Timeframe | trend | RSI | MACD | Key Levels | Signal |
|---|---|---|---|---|---|
| 1 hour | neutral | 52.1 | Bearish | $0.34 (middle track) | 🟡 Under preparation |
| 4 hours | Bullish | 52.4 | Bullish | $0.34 (above EMA) | 🟢 Moderate rise |
| Daily Line | neutral | 56.1 | Bearish | $0.34 (testing resistance) | 🟡 Balanced state |
Key Levels :
- Support levels : $0.322 (medium strength), $0.291 (strong support)
- Resistance levels : $0.367 (medium resistance), $0.383 (strong resistance, breakout target)
Feasibility assessment of a market capitalization of US$1 billion
Favorable factors
- Repurchase support : A repurchase mechanism of more than 50% of revenue provides long-term buying support and reduces circulating supply
- Whale accumulation : September's large purchases indicate institutional confidence, reducing selling pressure
- BTCFi Narrative : As Bitcoin L2, it benefits from the expansion of the BTC ecosystem and the growth of staking demand
- Technical consolidation : The current price range is healthy, accumulating momentum for subsequent breakthroughs
Challenging factors
- Low on-chain activity : Daily fees are only $59, DEX trading volume is negligible, and fundamentals are insufficient to support it.
- Token unlocking : Continuous unlocking until April 2028, increasing supply pressure every month
- L2 competition : Lack of unique advantages in fierce L2 competition
- Revenue scale : BTCFi's revenue scale is relatively small, and the repurchase impact is limited
in conclusion
MERL has shown a certain degree of price resilience thanks to its official buyback commitment and the accumulation of whale. The technical consolidation is creating conditions for subsequent breakthroughs. To achieve the goal of a market capitalization of US$1 billion, the key lies in:
- Technical Breakout : A break above the $0.383 resistance level on high volume is needed to confirm upward momentum.
- Improving fundamentals : BTCFi revenue growth and increased on-chain activity are key
- Time window : Considering the continuous unlocking pressure, it needs to be achieved within 6 months, with a probability of about 50%.
Overall, MERL has the potential to reach a market value of US$1 billion, but it requires the cooperation of multiple favorable factors. Investors should pay close attention to technological breakthroughs and fundamental progress.