Morpho trades near $2.1056 support as oversold conditions limit downside

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Morpho drops 8.59% to $2.23 today

Highlights

Morpho Blue received $90.7 million in new PYUSD deposits over 30 days, showing increased institutional activity in DeFi stablecoin lending.
RLUSD balances on Morpho Blue grew by $17.5 million, with Sentora vaults holding $280 million as Ripple's stablecoin presence expands.
Morpho trades below important short- and medium-term averages with bearish momentum, expected to move in a $2.1056 to $2.3624 range in coming days.

Liquidity influx and stablecoin growth reinforce DeFi demand amid selling

Morpho Blue registered a significant $90.7 million increase in PYUSD deposits over the 30 days leading up to August 21, 2026, reflecting rising institutional demand for regulated stablecoin yield in DeFi lending, according to Cryptobriefing. This sizable inflow enhances on-platform liquidity and can support longer-term protocol stability. Additionally, RLUSD deposits on Morpho Blue advanced by $17.5 million in the same period, with Sentora vault balances reaching $280 million as Ripple's stablecoin expands its presence in DeFi lending. Both developments highlight continued capital formation for Morpho, though price action has remained under broader selling pressure.

Bearish momentum prevails as buyers face layered technical resistance

Technical analysis shows MORPHO trading below both the MA-20 and MA-50 on the h1 chart, underscoring short- and medium-term resistance for buyers. The asset remains above the MA-200, preserving a longer-term bullish structure. Immediate resistance is defined by the Ichimoku Kijun level at $2.3025. Momentum indicators, including MACD and ADX, signal bearish conditions, while the RSI at 38.68, along with CCI and Stochastic RSI in oversold territory, suggests potential short-term seller exhaustion. Both Bull/Bear Power and the Awesome Oscillator reinforce the prevailing negative momentum.

Downside risk dominates as consolidation signals uncertain rebound

In the short term, MORPHO is expected to consolidate within a range of $2.1056 to $2.3624, reflecting typical volatility at current levels. There is a 75% probability of a downside move extending below support, while the chance of a rebound above immediate resistance is lower at 25%. A bullish scenario would be triggered by a break above the Ichimoku Kijun, paving the way for recovery, whereas a drop below the lower boundary could accelerate further losses.

Anton Kharitonov, expert at Traders Union, notes that despite strong institutional inflows into PYUSD and RLUSD on Morpho Blue, MORPHO price remains under clear technical pressure. He sees sustained selling below key moving averages and bearish momentum dominating the short-term outlook. Kharitonov remains cautious until the asset reclaims the Ichimoku Kijun level. "Base case remains defensive here — I stay neutral unless price recovers above $2.3025."

Earlier, analysts noted that Morpho was demonstrating sustained bullish momentum buttressed by positive technical signals and strong intraday buying activity. The current article signals a notable shift in trend, with short- and medium-term technical weakness now prevailing and traders advised to monitor consolidation support levels as downside risk mounts.

Source of Data: MORPHO Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.