Solana (SOL) Price Surge – May 16 Update
Solana (SOL), the native cryptocurrency of the Solana network, has surged over 14% in the last 24 hours to reach around $163.50 on May 16. The cryptocurrency’s monthly returns stand around 38%, outperforming most big-cap crypto rivals, including Bitcoin (BTC).
The uptick in SOL’s value so far in May can be linked to several factors, including declining U.S. bond yields that indicate a growing appetite for riskier assets like crypto. Meanwhile, several optimistic news updates have boosted the interim demand for SOL tokens among speculators.
Robinhood enables SOL staking for European clients
Trading platform Robinhood is targeting European users to expand its crypto services as legal challenges loom in the United States. On May 15, the company announced its first crypto-staking product, exclusively for European customers.
According to an announcement, Robinhood customers can now stake Solana and receive a 5% yield through the app. Competitors offering SOL staking, including Kraken and Binance, advertise yields of up to 5% and 8%, respectively. Stakers receive passive rewards from their holdings in exchange for supporting the network. When staking, users lock up their tokens to validate transactions and secure network operations.
The announcement boosted investor confidence in Solana, as being featured by a major platform like Robinhood can be seen as a validation of the cryptocurrency’s potential and stability. In addition, the prospect of earning a 5% yield through staking could have encouraged more people to buy and hold SOL, reducing its available supply in the market and contributing to a price increase.
SOL rises after U.S. CPI release
SOL’s gains in the last 24 hours further appeared on the backdrop of the latest U.S. Consumer Price Index (CPI) report. Notably, core inflation rose 0.3% from March, matching consensus expectations and breaking a three-month streak of higher-than-expected readings that had raised concerns about entrenched inflation.
Additionally, the year-over-year core CPI measure slowed to its lowest pace in three years, further alleviating inflation fears. In response, the benchmark U.S. 10-year Treasury note yield slipped from 4.44% to as low as 4.31%. Lower yields on safe-haven assets like Treasuries often lead investors to seek better returns in riskier assets, including cryptocurrencies.
Solana memecoin craze is exploding
Since the start of April, over one million new tokens have been created, with over 370,000 new tokens emerging on Ethereum and over 640,000 new tokens launched on Solana. According to a Dune Analytics dashboard pump.fun, 466,914 of the 643,000 new tokens on Solana were memecoins.
The growing in Solana token launches coincide with a rise in the total value locked (TVL) across its ecosystem—from 23.75 million SOL on April 1 to 28.90 million SOL on May 15. The influx of new tokens, particularly memecoins, on Solana indicates heightened activity and growing adoption of the platform.
More token launches typically lead to increased transactions and network usage, driving demand for SOL.
Cup-and-handle breakout underway
From a technical standpoint, SOL’s gains today appear after testing the 100-day exponential moving average (100-day EMA; the purple wave in the chart below) as support. Furthermore, the upside moves are part of what appears to be a cup-and-handle pattern. The pattern is characterized by a rounded bottom (cup) and a consolidation period (handle), indicating a potential breakout to higher prices.
It typically resolves when the price breaks above the neckline resistance and rises by as much as the distance between the cup’s trough and the neckline. SOL’s price has entered the breakout stage of the pattern after closing above its neckline resistance of around $158.
The cryptocurrency is now well-positioned for a move toward $206 in May, up over 26% from the current price levels.
