Cardano price continued to fall on Wednesday, correcting nearly 7% so far this week. Avalanche prices also fell slightly on Wednesday, continuing to fall more than 8% this week. The long-short ratio for ADA and AVAX is below 1, suggesting that more traders are betting on a decline in asset prices.
Cardano (ADA) and Avalanche (AVAX) prices continued to fall on Wednesday after correcting over 7% and 8%, respectively, so far this week. The technical outlook and on-chain indicators for both altcoins suggest that the decline will continue.
Cardano bulls are showing signs of fatigue
Cardano price movement on the weekly chart shows a 50% price retracement level at $1.30 in the first week of December (from a high of $2.37 in November 2021 to December 2022), after rising more than 250% since early November. It was rejected at a monthly low of $0.23). . Since then, ADA has fallen more than 20% and is trading at around $1.02 as of writing on Wednesday.
If ADA continues to correct, it could widen its decline by 25% to retest the next weekly support at $0.74.
The Relative Strength Index (RSI) momentum indicator on the weekly chart also supports the correction in Cardano price. RSI indicates overbought conditions and points downward. A break below the overbought level of 70 would indicate a weakening of the bullish momentum and increase the chances of a continuation of the decline in ADA.
ADA/USDT weekly chart
Additionally, Cardano’s long-short ratio is at 0.82, the lowest level in a month, indicating bearish sentiment in the market, according to data from Coinglass. A ratio below 1 suggests that more traders are betting on a decline in the asset's price, supporting the bearish outlook for ADA.
ADA long/short ratio chart. Source: Coin Glass.
Avalanche prices are ready for a pullback
Avalanche's weekly chart shows it has soared more than 120% since early November, facing resistance near $55.76 in the first week of December. Since then, AVAX has fallen more than 15% and is trading at $46.40 at the time of writing on Wednesday.
If AVAX continues its decline, it could widen its decline by 12% to retest the next weekly support at $40.55.
The RSI on the weekly chart supports the avalanche price rebound. At 62, the price has turned down after rejecting the overbought level of 70 on December 2nd, indicating weakness in bullish momentum. If the RSI closes below the neutral level of 50, the price of AVAX will fall sharply.
AVAX/USDT weekly chart
Similar to Cardano, Avalanche’s long/short ratio is at 0.80, the lowest level in a month, indicating bearish market sentiment.
AVAX long and short ratio graph. Source: Coin Glass.
