Useless Coin [USELESS] has been on the rise as buyers have stepped into the market, with the asset gaining roughly 38% in the past day, at press time.
The gain, however, is facing a real test as unfilled liquidity clusters below the current price, raising concerns about a potential pullback. Bullish sentiment and capital inflows remain two key factors that have pushed the price higher despite signals pointing to a possible decline.
USELESS’ perp market backs the rally
The gains on USELESS have extended its previous run, with the asset delivering a 183% gain over the past seven days. This time around, AMBCrypto traced the gains to consistently high capital inflows into the perpetual market.
An analysis of capital inflows and outflows shows that more than $500 million in funds flowed through USELESS over the past day, pushing its netflow above the $20 million mark on the chart.
The flow of capital, especially at this scale and during a bullish period, points to strong interest among perpetual investors and adds to the positive price outlook.
More importantly, the OI-Weighted Funding Rate, which gauges capital positioning in the perpetual market, stood at $166 million as of writing.
This shows that a large portion of the funds in the market is tied to long positions, while the funding rate stood at 0.0056% at press time.
Liquidity below price poses a pullback risk
The liquidation heatmap, using a one-month timeframe for this analysis, shows a cluster of unfilled liquidity below the current price.
The heatmap shows a dense liquidity cluster around the $0.097 region, which could weigh on the asset and drag its price lower.
Clusters typically mark areas on the chart where there is a high density of unfilled orders in the market. These areas can attract price as traders move toward the available liquidity. If this pull occurs, USELESS could decline toward the shaded region on the chart.
Notably, the liquidity density at this level remains relatively low and does not have enough depth to trigger a significant move toward the lower region of the chart.
For now, if perpetual market capital does not become overheated or the asset does not become overbought, USELESS could maintain its bullish momentum despite the liquidation risk below the current price.
Moderate sentiment supports the bullish outlook
Market sentiment, which gauges how investors view the asset, remains positive overall, although it is bullish only on a moderate scale.
The sentiment chart uses a scale from -10 to 10 to measure investors’ bullish or bearish outlook, with readings at either extreme representing the strongest levels of bullish or bearish sentiment.
At the time of writing, the indicator had a reading of 2.77, confirming that while investors expected a positive return, they were not completely bullish.
Still, this reading is enough to maintain positive price momentum. However, the sentiment remains worth watching in case the outlook shifts and puts additional pressure on USELESS.
Final Summary
- USELESS $505 million perpetual market inflow and long positioning supported its bullish momentum.
- A liquidity cluster around $0.097 could expose USELESS to a pullback, while investors’ sentiment remains moderately bullish.
