Solana (SOL/USD) bounced back on Friday as cryptocurrency prices staged a comeback. The coin’s price rose to $105, which was higher than the year-to-date low of $81. It has a market capitalization of more than $33 billion and is one of the best-performing coins.
Why is Solana rising?
Solana made headlines this week as investors reflected to the massive wormhole hack that led to a $320 million being lost.
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The news affected Solana because Wormhole is a bridge that connects to Ethereum’s network. As such, there were concerns about Solana’s ecosystem considering that it has had its share of challenges in the past.
On Friday, Solana price likely rose as investors reflected on the hack. Besides, Solana itself was not involved since individual developers are responsible for what happens in the ecosystems. For example, people don’t blame Apple if an iPhone app is hacked.
Moreover, there is no blockchain platform that has not experienced hacks in the past including Binance Smart Chain and Ethereum.
The second reason why Solana is rising is that sentiment in the market has improved today. As you recall, the Nasdaq 100 index crashed hard on Thursday as investors reflected on the latest Facebook, Spotify, and PayPal earnings.
On Thursday, all indices, including the Dow Jones and S&P 500 jumped sharply as the market reflected on the latest results by Amazon and Snap. In the past few months, we have seen a close correlation between stocks and cryptocurrencies.
Third, SOL price is rising ahead of the upcoming US non-farm payrolls numbers. Analysts expect the numbers to show that the labor market was under pressure in January. Precisely, they expect that the economy added less than 200k jobs.
These numbers are important because of the Fed. If they are weak, analysts will start pricing in fewer rate hikes this year.
Solana price prediction
The four-hour chart shows that the SOL price has been in a bullish trend in the past few days. The coin is slightly below the important resistance at $113, which was the highest level this month and is also slightly above the 23.6% Fibonacci retracement level.
It has also moved slightly above the 25-day and 50-day moving averages. Therefore, there is a likelihood that the coin will continue rising as bulls target the key resistance level at $113. A move above that level will open the possibility of it rising to $130, which is the 38.2% retracement level.
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Source: https://invezz.com/news/2022/02/04/solana-price-is-bouncing-back-is-it-safe-to-buy-sol/