The memecoin sector has been one of the best-performing sectors in crypto over the past week. Data from Glassnode showed that the sector has improved its market capitalization by 11.5%, outperforming Bitcoin [BTC] gains by a comfortable margin.
Source: Glassnode
Useless [USELESS] was one of the strongest short-term bullish memes in the market, with a 26% rally in the past week and a 14.47% move in just the past 24 hours.
Yet, with a market cap of only $99.85 million at the time of writing, it was hardly the one moving the needle for the memecoin sector.
Other tokens like Memecore [M], with its flash volatility, and the 15% weekly price bounce Pepe [PEPE] have contributed more to memes’ strength. Yet, that does not take away from USELESS as a potential trading opportunity.
Should you buy the USELESS momentum?
Source: USELESS/USD on TradingView
On the 1-day chart, the technical indicators were all bullish to varying degrees. The A/D has been forming higher lows since April, but has not made new highs yet. The OBV was different and has kept up its uptrend despite the heavy losses in January and February.
This suggested that the relatively small-cap memecoin retained bullish market participant conviction and could move higher on the back of this demand.
The moving averages were well below the market price, and the MFI was at 73. Both momentum indicators also favored the bulls.
Yet, structurally, the price action retained a bearish long-term bias. The current move up to $0.101 remained within the bounds of the 78.6% retracement level at $0.109.
A breakout past the swing high at $0.131 is needed to flip the long-term structure bearishly.
Traders’ call to action- Sell
Source: CoinGlass
The recent surge higher swept the pocket of liquidity at $0.095. The influx of short liquidations forced market buy orders that helped push prices past $0.1.
The liquidity sweep, backed by steady spot demand, might yet result in a USELESS trend reversal.
That moment is not yet upon us. The $0.131 level is the line the bulls must hold. As things stand, traders and investors can look to take profits from the bounce and remain sidelined or even position themselves short, with invalidation above the swing point on the daily timeframe.
Final Summary
- The memecoin sector has seen some capital inflows, and USELESS was one of the memes with bullish short-term sentiment.
- The $0.109-$0.131 was a crucial overhead resistance. If broken, the long-term trend would flip bullishly.
