Solana Spikes Following Staking Service Launch
17 May, 2024 ● Coin news
Solana, the native cryptocurrency of the Solana network, has seen a significant rise of over 14% in the last 24 hours, reaching approximately $163.50 on May 16.
This increase brings the cryptocurrency's monthly gains to around 38%, outshining most major cryptocurrencies, including Bitcoin.
The rise in Solana's value this May is attributed to a combination of factors, notably the drop in U.S. bond yields, which suggests an increased appetite for riskier assets like cryptocurrencies.
Additionally, favorable news updates have stimulated speculative interest in SOL tokens.
Robinhood, a trading platform, is focusing on European expansion for its crypto services amidst legal hurdles in the United States.
On May 15, Robinhood introduced its first crypto-staking product, available exclusively to European customers.
Robinhood's announcement mentioned that its customers could now stake Solana with a 5% yield via the app, compared to yields of up to 5% and 8% offered by Kraken and Binance, respectively.
Staking involves users committing their tokens to support network operations, including transaction validation, in return for passive rewards.
This new service from Robinhood has likely bolstered investor confidence in Solana, as association with a prominent platform can validate the cryptocurrency's potential and stability.
The potential to earn a 5% yield on staked Solana may also motivate more individuals to purchase and hold SOL, reducing its market availability and helping drive up its price.
The recent gains in SOL also align with developments in U.S. economic indicators.
Notably, the latest Consumer Price Index (CPI) report showed core inflation rose 0.3% from March, aligning with consensus expectations and breaking a streak of higher-than-expected readings.
Moreover, the year-over-year core CPI rate slowed to its lowest in three years, easing inflation concerns.
Consequently, yields on U.S. 10-year Treasury notes dropped, pushing investors towards riskier assets like cryptocurrencies.
Since early April, more than one million new tokens have been launched, including over 640,000 on Solana, many of which were memecoins as per a Dune Analytics dashboard.
This surge in token activity on Solana, with its total value locked (TVL) increasing from 23.75 million SOL on April 1 to 28.90 million SOL by May 15, signals robust platform activity and adoption.
The influx of new tokens typically increases transactions and network demand, boosting the demand for SOL.
From a technical analysis perspective, SOL's recent price movements have followed a cup-and-handle pattern, indicating potential for higher prices.
After successfully testing the 100-day exponential moving average as support, SOL has broken above the neckline resistance around $158, positioning it for a possible climb towards $206 in May, which would represent an increase of over 26% from current levels.
Sources:
https://cointelegraph.com/news/why-is-solana-price-up-this-week
https://newsroom.aboutrobinhood.com/robinhood-crypto-staking-europe/
