Fed Rate Cuts and USELESS Funding Analysis

TL;DR

The Federal Reserve cut interest rates by 25 basis points to 3.50%-3.75% on December 10, but Powell's hawkish comments triggered a sell-off in risk assets. The USELESS token failed to benefit from the rate cut , instead experiencing significant capital outflows: a 11.55% drop in 24 hours, a 24.91% drop in 7 days, and a 10.41% decrease in futures open interest to $20.59M, with long positions liquidated at a staggering 99%. Current liquidity indicators show selling pressure dominating, and the technical charts exhibit a bearish structure; the so-called "positive news" has not materialized.

Macroeconomic Background: Hawkish Shift Following Less-than-Expected Rate Cuts

The actual impact of the Federal Reserve's policies

The Federal Reserve announced a 25 basis point rate cut on December 10, 2025, lowering the target range for the federal funds rate to 3.50%-3.75% . However, hawkish forward guidance became crucial:

• Only one interest rate cut is projected in 2026 , far fewer than the market's expectation of multiple rate cuts.
• Chairman Powell emphasized a cautious approach to future easing policies, limiting expectations of further liquidity releases.

Crypto Market Reaction

• Bitcoin : Dropped from over $94,000 to $90,253, a decrease of approximately 4%.
• Market liquidation : Over $1 billion was liquidated across the entire market, with Altcoin generally falling by 2-5%.
• Risk appetite shifts : Funds are withdrawing from highly volatile assets and flowing into relatively stable assets such as Bitcoin.
• BTC futures open interest : remained at $58.88 billion (only -0.13%), indicating defensive allocation by institutional funds.

USELESS Liquidity Status: Funding Pressure

Key metrics (as of 08:00 UTC, December 11, 2025)

Exchange distribution and liquidity depth

Futures market open interest distribution :

• Bybit : $6.69M (-9.21% 24h)
• Binance : $4.54M (-9.02% 24h)
• Exchanges such as OKX and Gate.io have reduced trading volume across the board.

Top 3 spot trading volumes (24 hours):

• LBank : $8.67M
• Coinbase : $3.87M
• KuCoin : $1.58M

On-chain activity and fund flows

DEX data (Raydium-dominated):

• 24-hour DEX trading volume: $1.31M - $1.6M
• Buy orders: 3,158-4,348 ($831K)
• Selling: 4,473-5,090 transactions ($831K)
• The buy-sell ratio was close to 1:1 , but the number of sell orders significantly exceeded the number of buy orders, indicating selling pressure from retail investors.

Holder structure :

• Total holders: 38,264-38,682
• Top 1 holder (Gate.io related): 34.53M USELESS (3.46% supply)
• Top 10 concentration: approximately 25% of supply
• Daily active addresses: Approximately 1,000+ (562 buyers vs 619 sellers on DEX)

Technical Analysis: Signal of Liquidity Depletion

Price Structure and Trends

Current status (08:00 UTC, December 11, 2025):

• The price is 0.09108 USDT , near the lower Bollinger Band (0.0863), indicating oversold conditions but no sign of a bottom.
• All major moving averages are in a bearish alignment:
  • EMA(12): 0.1052
  • EMA(26): 0.1210
  • SMA(50): 0.1610
  • The price is below all moving averages, indicating continued downward pressure.

Momentum and volume indicators

Liquidity risk in the futures market

Clearing data (24 hours):

• Total liquidation amount: $196,674
• Long positions liquidated: $195,093 ( 99% of total)
• Short position liquidation: only $1,581

Funding rates :

• Major exchanges maintain a positive fee rate of 0.005%.
• The long position pays funding fees to the short position every 4-8 hours.
• This indicates a slightly over-leveraged long position , which could easily trigger a chain of liquidations in a low-liquidity environment.

Support and Resistance

• Key support : $0.0863 (lower Bollinger Band)
• Direct resistance : $0.1090 (Bollinger Band Middle Line/EMA12)
• Strong resistance zone : $0.1210 (EMA26) → $0.1610 (SMA50)

Social sentiment: hype disconnected from reality

Mainstream Narrative

• Positioning : A community-driven project on the Solana blockchain that emphasizes the concept of "uselessness" in its meme token.
• Social sentiment : Leaning towards promotional, placing USELESS alongside well-known meme coins such as WOJAK.
• Missing element : There are no highly interactive tweets that directly link UESS to Fed policy ; most are general statements that "interest rate cuts are good for the crypto market."

Gaps between macro liquidity expectations and reality

Theoretical Expectations (Social Media Promotion):

• Interest rate cuts → lower borrowing costs → funds flowing into risky assets → benefits meme coins

Actual situation :

• Powell's hawkish comments → Tightening liquidity expectations → Institutional funds defensive → Altcoin sell-off
• As a highly volatile meme coin, USELESS was the first to suffer from a liquidity drain.

in conclusion

The Fed's rate cut did not bring any real benefit to USELESS . On the contrary, the hawkish policy shift triggered a broad sell-off in risk assets. USELESS fell by 11.55% and 24.91% in the past 24 hours and 7 days, respectively, with futures open interest shrinking by 10.41% and long positions being liquidated at a rate of 99% , all pointing to tightening rather than improving liquidity .

Key risk factors :

1. Macroeconomic Environment : Only one interest rate cut is expected in 2026, limiting the scope for medium- to long-term liquidity release.
2. Technical Analysis : The downtrend is complete, the OBV remains negative, and there is a lack of buying support.
3. Futures Market : Highly leveraged long positions are prone to triggering a stampede in a liquidity-scarce environment.
4. Relative performance : Compared to the stable holdings of BTC, USELESS experienced a more significant outflow of funds, indicating the withdrawal of speculative capital.

Current assessment : The so-called "positive funding environment" has not yet materialized, and the short-term liquidity environment is putting pressure on, rather than supporting, USELESS. If the price falls below the $0.0863 support level, it could trigger further liquidation and a liquidity crisis. Investors should be wary of the continued divergence between macroeconomic policy expectations and the actual performance of USELESS.