USELESS, a Solana-based memecoin, has seen its price skyrocket more than 900% from its August low, trading near $0.316 on Wednesday. The rally has pushed the token to its highest level since October 2025, making it one of the top-performing memecoins in recent months. However, a closer look at derivatives positioning and technical indicators suggests the rally may be losing steam, with a potential correction of around 50% on the horizon.
According to data from CoinGlass, the one-week liquidation heatmap for USELESS reveals a significant imbalance between long and short positions. If the token were to extend its rally to approximately $0.347, only about $540,000 in cumulative short positions would be liquidated. In contrast, a decline toward $0.10 could trigger nearly $6.7 million in cumulative long liquidations. This disparity indicates that traders betting on further gains have much more capital at risk than those positioned for a drop, setting the stage for a possible liquidation cascade if the price starts to fall.
The largest concentration of liquidity sits near $0.1483, where approximately $266,170 in long liquidations are clustered. If USELESS drops from its current level to that zone, cumulative long liquidations could reach roughly $4.46 million. Liquidation clusters often act as price magnets because market participants are aware of the large number of vulnerable positions. When the price reaches a major cluster, exchanges automatically close leveraged positions, adding selling pressure that can push the price into the next set of liquidation levels, creating a cascading decline.
The risk is particularly acute after a near-vertical rally, as many traders may have entered leveraged positions at increasingly elevated prices. A decline from $0.337 to the $0.1483 liquidity zone would represent a drop of approximately 56%, while a move to $0.10 would mean a correction of roughly 70%. These levels are potential liquidation destinations rather than fixed price targets, but they highlight the potential for sharp volatility if selling pressure builds.
Technical analysis adds to the bearish case. USELESS's four-hour chart shows an ascending broadening wedge, a pattern characterized by two diverging trendlines and progressively wider highs and lows. This formation often signals increasing volatility and weakening control by the prevailing trend. After an extended rally, it can be particularly concerning as it suggests buyers and sellers are becoming more aggressive while price action grows less stable. The token is currently testing the wedge's upper boundary around $0.32-$0.34 after rebounding from approximately $0.20.
Momentum indicators are also flashing warning signs. While USELESS has produced a higher high on its four-hour chart, the Relative Strength Index (RSI) has formed a lower high compared with its previous peak, creating a bearish divergence. This pattern indicates that price is rising even as momentum weakens, often a precursor to a correction. Although a bearish divergence does not guarantee an immediate reversal, it becomes more concerning when combined with the broadening wedge and the heavy concentration of leveraged longs below the market.
If USELESS is rejected from the wedge's upper trendline, the price could retreat toward the lower boundary between $0.16 and $0.17. The rising 100-period EMA on the four-hour chart sits near $0.163, strengthening that area as a potential support zone. A decline from approximately $0.322 to $0.163 would amount to a correction of around 49%. This target also aligns closely with the major liquidation concentration around $0.1483, making the broader $0.15-$0.17 region a critical support area. Buyers may attempt to defend this zone, but failure to hold it could expose the deeper $0.10 target and the remaining long liquidations below.
The bearish outlook would lose strength if USELESS decisively breaks above the wedge's upper boundary. A sustained move beyond the $0.34-$0.35 resistance zone would invalidate or delay the expected correction, potentially opening the door for further upside. However, given the current positioning and technical signals, traders should be prepared for heightened volatility in either direction.
For context, other assets have faced similar dynamics. For instance, Zcash's rally faces overbought risk as its RSI hits 76, and HYPE defies an $820M unlock with record open interest. These examples illustrate how technical and derivatives data can signal potential reversals in volatile markets.
This article is for informational purposes only and does not constitute financial advice.
