USELESS Coin gained over 12% in just 24 hours, turning weekly losses into gains of approximately 5%. According to reports from AMBCrypto, this resurgence coincided with similar gains in other memecoins including FARTCOIN, BONK, and dogwifhat (WIF). The memecoin's performance was part of a broader memecoin rally that saw prices recover towards the end of last week, with Open Interest (OI) also experiencing a slight return.
The notional value of outstanding derivatives contracts for USELESS Coin increased significantly on both centralized exchanges (CEXs) and decentralized exchanges (DEXs). As reported by AMBCrypto, USELESS had the highest OI-to-market-cap ratio of 11.86% of any memecoin on Binance perps, with OI of $8.30 million and market cap of $70 million. On DEXs like Lighter, the biggest platform listing USELESS, it maintained more perps OI than virtually every other memecoin except TRUMP. This data indicated excessive market leverage that may have driven the day's rally.
The spike in leverage was evident with explosive buying volume, which increased by 9.9x over the last 24 hours, driving the price higher. According to AMBCrypto, a short squeeze at $0.07065 amplified the uptrend to the day's peak of $0.07745. Bulls have been defending key levels, with liquidity clusters located at the highest liquidation leverage clusters at $0.070. The Chaikin Money Flow (CMF) was rising with a reading of 0.16, indicating bulls buying at $0.070, though there remains risk of a price crash if leverage is withdrawn.
USELESS broke above a bullish reversal pattern on the 4-hour chart but still traded below an ascending trendline support, which now acts as resistance. As reported by AMBCrypto, after such a parabolic move, prices tend to retrace, which USELESS appeared to be doing at the $0.070-level. The retest might pass, as the Chaikin Money Flow was rising with a reading of 0.16, suggesting bulls buying at $0.070. However, if the price breaks below $0.070, it would invalidate the bullish scenario and indicate further downside potential. A reclaim of the trendline would affirm the bullish reversal.
USELESS Coin showed correlation with established memecoins like BONK, with a Correlation Coefficient of 0.73. According to AMBCrypto, when OI becomes disproportionately large, the market becomes highly vulnerable to rapid deleveraging events, liquidation cascades, or severe price squeezes. The excessive leverage observed across both CEXs and DEXs suggests that while the current rally may be sustainable, it remains under threat from potential leverage withdrawal events. The correlation with other memecoins indicates broader market dynamics affecting the sector.
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