Memecoins appear to be pausing their rally that began earlier this year.
For example, Useless Coin [USELESS] has dropped more than 12% in the past 24 hours, with its price still trending downward at the time of writing.
USELESS Coin breaks trendline support
The price action charts showed that USELESS broke an ascending trendline support that had been in place since the start of this month. The first week of January 2026 saw the memecoin reach $0.12, but bulls were unable to break past this level.
The MACD was bearish over the past two days, though its momentum was weak. Moreover, the Money Flow Index (MFI) had also declined from a peak of 77 to 35 at press time.
This indicated capital was flowing out of the token.
Source: TradingView
In case the decline continues, the price could retest the breakout level at $0.06958 of the range that ignited this rally. However, a resurgence of bulls could invalidate such an undertaking.
The decline was not only dependent on a technical breakdown; on-chain data also supported this trend.
Institutions offload the memecoin
As per on-chain data from Solscan, institutions were offloading their tokens. Wintermute and Coinbase were moving their USELESS coins to the hot wallet, potentially for selling.
Wintermute moved more than $131K worth of the tokens, while Coinbase moved over $500K in capital. In total, more than $600K in USELESS was ready for selling.
Source: Solscan
However, this was not the case for the Kraken exchange. The exchange moved more than $194K to their cold wallet, indicating accumulation.
As a result, the institutional activity showed mixed sentiments, though the selling activity was more impactful on price. In fact, the Long/Short Ratio was at 0.9 as of writing, suggesting more trades, even from retail, were being sold.
A look into volume, OI, and max pain levels!
More data showed why USELESS’s price was declining.
At press time, Open Interest (OI) dropped sharply from $40 million to $33 million within a single day. This decline followed a steady uptrend that had been in place since the 30th of December.
Trading volume mirrored the move, plunging from $122 million to $82 million over the same period.
Source: CoinGlass
Meanwhile, the maximum liquidation pain for the memecoin indicated that a short squeeze could occur if the price reached $0.1242 again.
On the other hand, the decline could be intensified if the price broke below $0.1020. This was the max pain level for bulls.
Source: CoinGlass
Altogether, the rally could be over, indicating a seasonal tendency where cryptos start the year with a surge.
Conversely, it could be a pause before the price rally continuation, especially now that memecoins have added over $8 billion to their capitalization.
Final Thoughts
- USELESS crashes 12% amid a technical breakdown, but this could be a temporary pause.
- Institutions offloading, volume and OI declining, and shorts contributed to the downside movement.
