Solana price has exploded in impressive massive gains, almost reaching $20. The competitive smart contracts token currently trades at $18.90 after growing in value by 18% over the last 24 hours.
Although generally, the crypto market is stable with the odds favoring the bulls, SOL is among the best-performing tokens on Friday.
Solana Climbs to $20 As mSOL Liquid Staking Takes Traders By Storm
Liquid staking platforms like Lido took Ethereum by storm following the transition to a proof-of-stake protocol (PoS). They allow investors to leverage their staked tokens by accessing liquidity through a proxy token.
For instance, traders are staking SOL, which earns them annualized returns. A top of this, they receive mSOL tokens, equal to the amount of SOL staked, which they can use as collateral to borrow more SOL. In the end, they can swap the borrowed SOL for the same mSOL.
According to a report by CoinDesk, Drift Protocol, a blockchain-based cryptocurrency trading venture on Solana’s network, launched the novel feature on Tuesday dubbed “Super Staking.”
This service integrates the entire re-leveraging process into a single-click solution, aiming to captivate a wider audience.
The Drift team also reported a rapid adoption of this new feature among digital asset traders, leading to a record-breaking surge in their daily active users immediately post-launch.
The massive uptick points to the market’s eager appetite for annualized returns that have the potential to escalate up to 10%.
“Definitely a huge success overnight,” co-founder Leow Cindy said in a written statement. “It shows that people are extremely keen on passive/leveraged yields.”
How to Scoop More Profits As Solana Price Rallies
Solana came under immense pressure earlier this month when the US Securities and Exchange Commission (SEC) alleged it is a security token amid the Binance and Coinbase lawsuits.
As expected, the news triggered a sell-off, with Solana price plunging to $13. This support, reinforced by a rising trendline relevant since the implosion of FTX in November, has been instrumental in SOL’s recovery.
At first, Solana price settled above higher support at $16. The massive spike in demand for SOL for liquid staking on Drift Protocol supplied the fuel for the trend reversal that has nearly reclaimed resistance at $20.
Solana price now holds above the 50-day Exponential Moving Average (EMA) at $18.28. As long as this support area allows SOL to consolidate at this elevated level, bulls will have an easier task propelling the token beyond $20.
Traders looking out for new buy orders in SOL may want to go ahead with the Moving Average Convergence Divergence (MACD) indicator flashing a buy signal. The Money Flow Index (MFI), at the same time, reveals that buyers have the upper hand with SOL’s inflow volume dwarfing the outflow volume by a big margin.
Subsequently, traders would be looking forward to Solana price weakening resistance at the 100-day EMA. Such a move would help build the momentum for SOL to close the gap to the next critical hurdle at $27.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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