MORPHO rallies 17.8% on DeFi rotation as sellers test $2.929 resistance

MORPHO rose 17.8% to $2.77 in the past 24 hours as traders rotated capital into DeFi assets on Ethereum, lifting peers Ethena and Aave.

Binance's top traders held a bearish account distribution during the rally, with short accounts at 56.55% versus 43.45% long, pushing the Long/Short Ratio to 0.77, according to CoinGlass data. The account split contrasted with the token's double-digit gain and rising trading volume. Continued strength around current prices could squeeze short sellers, while persistent short exposure may become more relevant as the initial buying wave weakens.

Selling pressure remained visible across both spot and futures markets. The 90-day Spot Taker CVD showed taker-sell dominance, an indication of continued aggressive selling in spot transactions, and the Futures Taker CVD extended the same pressure into leveraged activity, per CryptoQuant data. MORPHO still rallied by a double-digit figure as volume increased significantly during the session, though sustained sector participation would be needed to compel sellers to pull back.

On the daily chart, MORPHO surged through the $2.304 supply zone before reaching $2.929, where sellers prevented the breakout from extending further. The rejection pulled the price back to $2.77, leaving $2.304 as important support beneath the breakout. RSI hit 74.64 after the surge, bringing MORPHO into overbought territory, while its RSI average sat at 62.44. MACD showed a bullish signal with its line at 0.169 above the signal at 0.082, and the histogram stayed positive at 0.088.

MORPHO is a decentralized lending protocol on Ethereum that lets users supply and borrow assets through permissionless markets, competing with Aave in the DeFi credit space. The protocol has drawn fresh demand in recent weeks, with Pendle's USDC vault on Morpho attracting $50 million from 230 depositors in about ten days since its Aug. 4 launch, according to Pendle data.

The key question is whether the rally can survive the selling. A sustained hold above $2.304 would preserve the breakout structure and support another challenge toward $2.929. A failure at that support could instead deepen the retreat, as overbought conditions encourage further profit-taking around elevated prices. With short accounts outnumbering long accounts on Binance and taker selling persisting in both spot and futures, the next move depends on whether the DeFi rotation maintains momentum. If buyers absorb the selling pressure, a squeeze on short sellers could extend the move; if not, the token may consolidate below resistance.

This article is for informational purposes only and does not constitute investment advice.