Solana (SOL) has been in a downward spiral over the past week. Since reaching a new all-time high of $264.63 on November 22, SOL has encountered a surge in selling pressure. This has caused its price to drop by almost 10% in the past seven days.

This decline has led to an uptick in long liquidations in the SOL futures market. With strengthening bearish sentiments, Solana long traders may face more losses. Here is why. 

Solana’s Market Activity Faces Decline

Over the past week, SOL’s 8% price drop has wiped out $64 million in long positions from its derivatives market. 

Long liquidations occur when traders who have opened positions in favor of a price rally are forced to sell the asset at a lower price to cover their losses as the price falls. This happens when the asset’s price decreases beyond a certain level, forcing traders with long bets to exit the market.

This is a bearish signal for SOL because as Solana long traders attempt to avoid further losses to their investments, their selling pressure can increase and contribute to further downward movement in the market.

Notably, the decline in SOL’s price has led to a significant drop in activity in its derivatives market. This is reflected in the coin’s open interest, which currently rests at a weekly low of $3.34 billion. 

Open interest refers to the total number of outstanding contracts (futures or options) that have not been settled or closed. When open interest drops during a price decline, traders are closing their positions. This indicates reduced market participation and a lack of conviction in the asset’s positive price movement.

SOL Price Prediction: Bears Dominate the Market

Solana’s Awesome Oscillator confirms the uptick in bearish bias toward the coin. As SOL’s price records a decline over the past week, the indicator has returned red histogram bars. 

The Awesome Oscillator identifies an asset’s price trends and potential reversal points. When it returns red bars, it indicates that the shorter-term momentum is weaker than the longer-term momentum, suggesting a possible bearish trend or a decline in bullish momentum.

If selling activity gains more momentum, SOL’s price will break below the crucial support level, formed at $231.54. A dip below this price point will send SOL’s price downward to $205.56. 

On the other hand, if buying pressure gains momentum, SOL’s price will climb toward its all-time high of $264.63.

Algorand’s price has surged 19% over the past 24 hours, making it the market’s top gainer. The double-digit price rally has pushed the altcoin’s price to a two-year high of $0.34.

With strengthening trading activity, the ALGO token price may attempt to rally above $1 for the first time since 2022. This analysis delves into why that is possible. 

Algorand Open Interest Hits All-Time High

A rise in open interest has accompanied ALGO’s double-digit price hike. This has rallied by 28% over the past 24 hours and is currently at an all-time high of $81 million. 

Open interest measures the total number of outstanding contracts (futures or options) in an asset’s derivatives market and shows the level of trader participation. When it spikes during a price rally, it suggests increased market confidence and participation. It indicates that the rally is backed by strong demand and hints at sustained price growth.

Moreover, ALGO’s Moving Average Convergence Divergence (MACD) indicator observed on a daily chart confirms this bullish outlook. At press time, the altcoin’s MACD line (blue) rests atop its signal line.

This indicator measures an asset’s price trends and momentum and identifies potential reversal points. As in ALGO’s case, when the MACD line is above the signal line, the asset’s price is experiencing upward momentum, signaling a buying opportunity. This crossover indicates that short-term gains are outpacing long-term trends, reflecting positive market sentiment.

ALGO Price Prediction: $1 May Be Within Reach

Currently priced at $0.34, ALGO is holding steady above crucial support at $0.30. If this level strengthens as a solid support floor, it could drive the altcoin toward $0.47. A breakout above this resistance could potentially push it past the $0.50 mark and bring $1 into view. 

However, a shift in market sentiment could invalidate this bullish outlook. Increased selling pressure could cause the ALGO token price to shed its recent gains, pushing it below support at $0.30 and potentially sending it toward $0.08.

Coinbase CEO Brian Armstrong and technology billionaire Elon Musk have accused prominent political figures, including Senator Elizabeth Warren and SEC Chair Gary Gensler, of orchestrating a “mass debanking” campaign targeting the technology and cryptocurrency sectors during the Biden administration.

Their remarks follow revelations about secretive actions that allegedly resulted in the closure of bank accounts for dozens of tech entrepreneurs without notice or recourse.

Crypto Leaders Strong Rebuke of the Biden Administration

In a post on X (formerly Twitter), Armstrong labeled the debanking incidents as “unethical and un-American.” He pointed fingers at Warren and Gensler, accusing them of attempting to “unlawfully kill” the cryptocurrency industry.

Brian Armstrong argued that such actions contributed to the Democratic Party’s loss in the recent election. The Coinbase executive cautions the party to distance itself from Warren if it seeks political recovery.

He also revealed that Coinbase is using Freedom of Information Act (FOIA) requests to uncover the full scope of the issue, raising questions about potential legal violations.

“We’re still collecting documents via FOIA requests, so hopefully the full story emerges of who was involved and whether they broke any laws. Warren and Gensler tried to unlawfully kill our entire industry, and it was a major factor in the Dems losing the election,” Armstrong stated.

Armstrong’s remarks amplified a controversy shared by Elon Musk, who was known for his advocacy of free speech and innovation. The SpaceX CEO referenced a Joe Rogan interview with Marc Andreessen, co-founder of Andreessen Horowitz.

“Did you know that 30 tech founders were secretly debanked?” Musk remarked.

In the interview, Andreessen alleged that 30 tech founders were “secretly debanked,” describing it as an exercise of “silent government power.” This raises attention to the lack of transparency and warns of broader implications for freedom and innovation.

Custodia Bank’s Caitlin Long Joins the Criticism

Caitlin Long, founder and CEO of Custodia Bank, also weighed in, sharing her personal experience with repeated debanking. Custodia, a pro-crypto bank, has faced regulatory hurdles, culminating in layoffs attributed to the Federal Reserve’s delays in granting the institution a master account. Long’s ongoing lawsuit against the Fed seeks to address these challenges, with oral arguments scheduled for January 21, 2025.

“Yes—debanked repeatedly, in my company’s case (Custodia Bank). Keep an eye on our pending lawsuit against the Fed. Oral argument is scheduled for Jan 21 (the day after Inauguration Day),” Long commented.

The allegations come amid broader concerns over regulatory overreach in the crypto space. Warren and Gensler have been vocal critics of the industry, and the SEC, under Gensler’s leadership, has pursued multiple enforcement actions against crypto firms. Critics argue these measures stifle innovation and disproportionately target emerging technologies.

Custodia Bank’s struggles, among others like Consensys, reflect the challenges facing crypto-friendly financial institutions. The fallout from these allegations could reshape the relationship between the tech sector and US policymakers.

Brian Armstrong’s assertion that these actions contributed to the Democrats’ electoral losses highlights the political risk of alienating the tech and crypto communities. Additionally, Long’s lawsuit could set a precedent for how courts address claims of regulatory overreach.