Crypto & Forex October 21, 2025 0 Comments

MORPHO’s 15% Tumble: Is the $2 Mark a Dead Zone or a Goldmine Waiting to Explode?

Ever wondered what happens when a seemingly unstoppable bull market hits a sudden, sharp pothole? Well, MORPHO’s recent 15% nosedive might just be the perfect example — a $2.1 million derivative liquidation sent shockwaves through the market, flipping the Funding Rate into negative territory and dragging prices downward faster than most expected. Yet, here’s the twist: despite this sudden stumble, a whopping 95% of investors are still waving the bullish flag high, buoyed by solid liquidity clusters above $2 that whisper promises of a rebound. It’s like watching a drama unfold — will this be a brief plot twist or the start of a new chapter? Stick around, because this market reset might just hold the key to what happens next for MORPHO. LEARN MORE

Key Takeaways

What caused MORPHO’s sudden 15% decline?

A $2.1 million derivative liquidation triggered heavy outflows, flipping the Funding Rate negative (-0.0174) and sending prices sharply lower.

Why are analysts still cautiously bullish?

Despite the drop, 95% of investors remain bullish, and liquidity clusters above $2 suggest prices could rebound as the market resets.

Morpho [MORPHO] led the market decline in the past 24 hours after the asset recorded a steep 15% price drawdown.

This decline occurred amid strong bullish sentiment that dominated the market days earlier, until a sudden reversal forced liquidity out of the market and sent prices lower.

Spot activity shows bullish intent

The recent decline came as a shock, as bullish sentiment still dominates several market segments.

In the spot market, for instance, data shows that investors made the largest single-day purchase of MORPHO on October 20, amounting to $16.11 million.

However, purchases have slowed today, with investors buying only about $485,000 worth of the asset.

Source: CoinGlass

Interestingly, Community Sentiment—a gauge that measures whether investors are bullish or bearish—has tilted heavily toward the bullish side of the market.

Over 95% of investors say they would buy MORPHO, and historically, such sentiment has aligned with price movements on multiple occasions.

Derivatives take the blame

The steep downturn in MORPHO’s price largely stems from activity in the perpetuals market.

Data from CoinGlass shows that market conditions turned against investors who attempted to long the asset while anticipating a rally.

The reversal began when contract closures reached $2.1 million in a single day.

Morpho open interest weighted funding rate chart.

Source: CoinGlass

Given MORPHO’s relatively small market capitalization of $31.31 million, this liquidation volume was large enough to sway market direction significantly.

Adding to the downward pressure was a drop in the Funding Rate, which fell into negative territory.

A reading of -0.0174 suggests that traders in the derivatives market have grown heavily bearish, implying that MORPHO could continue declining in favor of short traders who currently pay the funding fee.