Morpho [MORPHO] recorded a double-digit price swing, at press time, as the broader market entered a recovery phase, with Bitcoin [BTC] rebounding to $68,000 in early trading hours.
The rebound improved overall market sentiment and lifted several altcoins, including MORPHO.
Despite rising optimism, the current rally, whether in the near or long term, does not appear free of obstacles. Chart structures indicate that the asset must overcome notable resistance levels before any sustained upside move can materialize.
MORPHO’s recent rally has pushed the price toward a key resistance level at $1.54, which it has yet to decisively break. This zone represents a technical barrier where previous selling pressure has emerged.
Although rising trading volume, around $38.5 million, suggested that a breakout attempt could gather momentum, the primary hurdle lies just ahead in the form of a Fair Value Gap (FVG).
An FVG represents a price imbalance on the chart where liquidity remains unfilled, often acting as a magnet for price.
When price approaches an FVG above current levels, it typically signals a supply imbalance. In such cases, the zone can attract price temporarily but may also trigger renewed selling pressure if sellers defend that region.
As a result, MORPHO could experience short-term volatility around this area.
However, broader market momentum will determine the outcome. If bullish sentiment remains intact and volume continues to support upward pressure, MORPHO could extend its rally toward the $3.5 region, marking approximately a 35% gain from current levels.
The Money Flow Index (MFI) signaled strong capital inflows into MORPHO, pushing the asset into overbought territory. Since the MFI crosses into overbought conditions above the 80 threshold, MORPHO’s current reading confirms this level has been exceeded.
This indicates that active buyers continue to drive momentum upward, though overbought conditions raise the likelihood of a pullback as traders secure profits.
The scenario aligns with earlier expectations of a move toward the supply FVG zone before any meaningful correction.
Meanwhile, the Average Directional Index (ADX), which measures trend strength, showed that the ongoing upswing retained solid momentum. Rising alongside price, the ADX confirmed that the current trend remains strong rather than weakening or fading.
A sustained increase in the ADX typically reflects growing conviction among market participants. If buyers continue deploying capital, MORPHO could maintain its upward trajectory in the short term.
Spot traders remain a crucial group to monitor. Current data suggests that many in this cohort view the recent rally as an opportunity to take profit, break even, or exit positions at reduced losses.
Over the past five days, even as MORPHO recorded gradual gains, spot market netflows reflected consistent selling pressure. At the time of writing, spot traders have sold approximately $214,000 worth of the asset.
Weekly, total netflows stand near $902,000. More notably, since the week ending November 10, weekly netflows have consistently tilted toward sellers. This persistent sell-side dominance indicates that distribution pressure remains active beneath the surface of the rally.
If spot selling continues, it could cap upside potential and weigh on MORPHO’s longer-term outlook. For now, the asset stands at a technical crossroads, supported by momentum indicators but constrained by structural resistance and steady spot outflows.
