Positive News Sends Price Upward

On May 2, the price of Solana (SOL) experienced a notable increase of over 10% within the last 24 hours, reaching $136.60.The recent gains in SOL can be attributed to a confluence of positive developments within the cryptocurrency market and broader economic signals that have buoyed investor sentiment.

New Restaking Solution Drove Solana’s Total Value Locked

In the realm of decentralized finance (DeFi), Jito Labs, known for its expertise in Solana infrastructure, is reportedly working on a new restaking solution. This service, akin to EigenLayer’s offering within the Ethereum ecosystem, allows validators to leverage their existing Proof of Stake (PoS) assets for additional security and services across multiple layers without requiring additional tokens.

News of Jito Labs’ development has resonated within the investor community, evidenced by a rise in the total-value-locked (TVL) in Jito’s liquid staking smart contracts from 9.92 million SOL on May 1 to about 10.5 million SOL the following day. Concurrently, Solana’s TVL also increased from 26.45 million to 27.21 million SOL. 

This Restaking News Is Perceived As A Driver Of Demand For SOL

This comes especially due to the enhancement of the utility and potential applications of Solana’s blockchain. In addition to this, SOL’s upward trajectory was further supported by the announcement of a new cross-chain bridge service by Zeus Network, which aims to connect Bitcoin with Solana. Scheduled for potential release in the third quarter of the year, the “Zeus Program Library” (ZPL) system will facilitate the conversion of users’ Bitcoin into zBTC tokens.

These tokens can then be utilized within the Solana ecosystem for a variety of activities including trading, participation in NFT marketplaces, and lending, thus potentially increasing transaction volumes and demand for SOL. Moreover, the broader cryptocurrency market is witnessing a recovery spurred by the latest developments from the U.S. Federal Reserve. At the conclusion of the Federal Open Market Committee’s (FOMC) meeting on May 1, officials decided to maintain the interest rate within the range of 5.25% to 5.5%, reflecting a cautious approach towards the U.S. economic outlook marked by a slowing GDP and persistent inflation.

Fed Chair Jerome Powell expressed doubts about further rate increases, emphasizing the need for compelling evidence to adjust the current policy aimed at directing inflation towards the 2% target. This stance resulted in a slight dip in the yields of the U.S. 10-year Treasury note by 0.1%, which in turn increased investors’ appetite for riskier assets such as cryptocurrencies.

As A Result Of These Developments, Solana Has Seen A Strengthening In Its Market Position

The cryptocurrency has been showing signs of robust accumulation since March, each time it approached its resistance-turned support area. The support from the 200-day exponential moving average has also reinforced this buying sentiment. Looking ahead, SOL appears poised for an extended rebound movement towards the $150 mark in May, a level that aligns with a resistance confluence comprising the 50-day EMA and the upper trendline of the cryptocurrency’s prevailing sideways channel.

In summary, the recent surge in Solana’s price is reflective of renewed investor confidence stemming from strategic technological advancements within its ecosystem, optimistic market dynamics, and favorable macroeconomic signals. These factors are collectively shaping a more promising landscape for SOL and other similar high-risk, high-return assets.