SOL Recovers After Finding Support As Jito Becomes Solana’s Largest Protocol Amid Bullish Momentum

Solana's native token SOL has shown signs of recovery after a prolonged bearish period. It is currently trading at $138.66, up 5% over the last 24 hours. This comes on the heels of SOL recording declines of over 30% over the previous 30 days. The read is now reduced to 27.11% as of writing as the bulls tightened their grip on the crypto market for a full recovery to wipe out all those monthly losses.

SOL Data Chart: CoinMarketCap

SOL's market capitalization stands at $61.9 billion, still ranking it the fifth best crypto by that metric. However, its 24-hour trading volume of $3.23 billion has reduced by 18.88%.

The recovery in SOL's price can be partly attributed to the positive macroeconomic data released by the Federal Reserve's Federal Open Market Committee (FOMC) meeting, which signaled no changes in interest rates, providing a boost to crypto assets for a potential recovery.

On the Solana ecosystem front, the liquid staking and maximal extractable value (MEV) infrastructure project Jito (JTO) has emerged as the largest protocol. It boasts a total value locked (TVL) of $1.4 billion, equivalent to around 10 million SOL. According to data from DeFiLlama, Jito accounts for a staggering 38% of the Solana ecosystem's $3.7 billion TVL.

Jito's flagship JitoSOL liquid staking token has seen approximately 40% of its supply deployed as collateral in decentralized finance (DeFi) protocols, according to the team behind the project.

SOL Technical Analysis

Over the past four weeks, Solana's price action has been largely bearish, with weekly candles all closing bearish after repeated rejections at the $209 resistance level. Two weeks ago, SOL found double support at the $125 zone, coinciding with a horizontal support level and a 5-month ascending trendline. However, the bearish run continued until this week when SOL found strong support, backed up by the positive macroeconomic data from the FOMC meeting.

SOLUSD Weekly Chart: TradingView

On the daily chart, SOL broke down from the 5-month ascending trendline on April 30th, as a result of the overall bearish crypto market arising from FOMC Rate cut expectations, ending the month on a bearish note. However, the price has since recovered after finding support at the $120 level, with the last two daily candles closing bullish and breaking out past the recently breached ascending trendline. Today, SOL opened at $137.57 and has traded between a high of $141.76 and a low of $136.61 so far.

SOLUSD Daily Chart: TradingView

The daily Relative Strength Index (RSI) reading of 42.41 suggests ample room for bullish activity to test key resistance levels above. The immediate resistance lies at the $160 level, which could act as a target for the current uptrend. However, if prices retrace and drop below the $120 support level, a further decline toward the $98.55 low cannot be ruled out, although the chances of such a scenario remain minimal given the current macroeconomic picture and favorable fundamentals.

On the 4-hour chart, SOL's immediate resistance is at the $160 level, serving as the current target. If the price retraces before the continuation of the uptrend and breaks down past the ascending trendline, a retracement to support at the $120 zone is more likely.

SOLUSD 4-Hour Chart: TradingView

The recent surge in the price of SOL and the growth of the Jito protocol on the Solana ecosystem highlights the strength, stability and potential of this blockchain network, despite the challenging market conditions faced in recent weeks, and SOL seems poised to regain bullish momentum in May 2024