MORPHO surges 17% on DeFi rotation, but can the rally survive selling?

Morpho [MORPHO] rallied 17.8% in the past 24 hours as traders switched their capital into decentralized finance (DeFi) assets.

The broader DeFi interest also lifted tokens including Ethena [ENA] and Aave [AAVE], creating a supportive sector backdrop.

The rotation, however, benefited MORPHO directly, as traders looked for exposure to decentralized lending infrastructure during the rotation.

Top traders resist the bullish move

Despite the rally, Binance’s top traders maintained a bearish account distribution during MORPHO’s price expansion. Short accounts reached 56.55%, while long accounts accounted for only 43.45% of the tracked positioning.

The Long/Short Ratio, as a result, dipped to 0.77, showing a clear numerical edge for the short accounts. This contrasted with MORPHO’s 17.8% gain and fast-growing trading volume.

However, despite the bearish positioning, buyers were able to push MORPHO quite a bit higher during the wider DeFi rotation.

With high demand around current prices, continued strength may cause a squeeze on short sellers. Alternatively, persistent short positioning could become increasingly relevant as the initial wave of buying activity weakens.

Taker sellers challenge the demand surge

Selling pressure remained visible across both Spot and Futures markets despite MORPHO’s strong daily price appreciation.

The 90-day Spot Taker CVD saw taker sell dominance, an indication of continued aggressive selling in spot transactions. Additionally, the Futures Taker CVD also maintained taker-sell dominance, extending the same pressure into leveraged trading activity.

However, MORPHO still rallied by a double-digit figure as volume increased significantly during the session. Sustained sector participation, however, would compel sellers to pull back, especially without a resurgence in price.

$2.929 rejection puts buyers under pressure

On the daily TradingView chart, MORPHO surged through the $2.304 supply zone before reaching $2.929, where sellers prevented the breakout from extending further.

The rejection pushed the price back to $2.774, leaving $2.304 as an important support beneath the breakout.

Notably, RSI hit 74.64 after the surge, bringing MORPHO to overbought territory after heavy buying. Meanwhile, its RSI average was at 62.44, reflecting the quick buying momentum that was built during the recent move.

MACD also showed a bullish signal with its line extending past 0.169 from its signal line at  0.082.

The histogram remained positive at 0.088, supporting the broader bullish structure despite resistance-driven selling near the $2.929 level.

A sustained hold above $2.304 would preserve the breakout structure and could support another challenge toward $2.929.

However, failure at the support level could instead deepen the retreat as overbought conditions encourage further profit-taking around elevated prices.

Final Summary

• MORPHO’s 17.8% rally gained strength from DeFi rotation and rising trading participation.
• Bearish traders and taker selling could challenge another attempt above $2.929.