Morpho (MORPHO) recorded a double-digit price change, at press time, as the broader market entered a recovery phase, with Bitcoin (BTC) rebounding to $68,000 in the first hours of trading.
The rebound improved overall market sentiment and pushed several altcoins higher, including MORPHO.
Despite growing optimism, the current recovery, whether in the short or long term, does not appear to be free of obstacles. Chart structures indicate that the asset must overcome notable resistance levels before a sustained upward move can materialize.
A major obstacle ahead
MORPHO’s recent rally pushed the price towards a key resistance level at $1.54, which it has yet to decisively breach. This area represents a technical barrier where previous selling pressures appeared.
Although the increase in trading volume, around $38.5 million, suggests that a breakout attempt could be gaining momentum, the main obstacle lies right in front of us in the form of a fair value gap (FVG).
An FVG represents a price imbalance on the chart where liquidity remains unsatisfied, often acting as a magnet for prices.
Source: Tradingview
When the price approaches an FVG above current levels, it generally signals a supply imbalance. In such cases, the area may attract prices temporarily but may also trigger further selling pressure if sellers defend that region.
As a result, MORPHO could experience short-term volatility in this area.
However, broader market dynamics will determine the outcome. If bullish sentiment remains intact and volume continues to support upward pressure, MORPHO could extend its rally towards the $3.5 region, marking a ~35% gain from current levels.
The dynamic is taking shape
The Money Flow Index (MFI) reported strong capital inflows into MORPHO, pushing the asset into overbought territory. With the MFI moving into overbought conditions above the 80 threshold, the current MORPHO reading confirms that this level has been exceeded.
This indicates that active buyers continue to drive upward momentum, even as overbought conditions increase the likelihood of a pullback as traders take profits.
The scenario aligns with prior expectations of a move toward the FVG supply zone ahead of any significant correction.
Source: Tradingview
At the same time, the average directional index (ADX), which measures trend strength, showed that the ongoing rally maintained strong momentum. By rising alongside prices, the ADX confirmed that the current trend remains strong rather than weakening or fading.
A sustained increase in ADX generally reflects growing conviction among market participants. If buyers continue to deploy capital, MORPHO could maintain its upward trajectory in the near term.
Look at Spot Traders
Spot traders remain a crucial group to watch. Current data suggests that many members of this cohort view the recent rally as an opportunity to take profits, break even, or exit their positions with reduced losses.
Over the past five days, although MORPHO has seen incremental gains, net cash market flows have reflected consistent selling pressure. At the time of writing, spot traders sold the asset worth around $214,000.
Weekly, total net flows are almost $902,000. Most notably, since the week ending November 10, weekly net flows have consistently tilted in favor of sellers. This continued dominance on the sales side indicates that distribution pressure remains active beneath the surface of the rally.
Source: CoinGlass
If spot selling continues, it could limit upside potential and weigh on MORPHO’s long-term outlook. For now, the asset is at a technical crossroads, supported by momentum indicators but constrained by structural resistance and regular cash outflows.
