- Cardano (ADA) and Avalanche (AVAX) prices continue to trade down, correcting more than 7% and 8% respectively this week
- Technical indicators like the Relative Strength Index (RSI) and long-to-short ratios suggest bearish sentiment and potential for further decline in ADA and AVAX prices
- If the correction continues, ADA could extend its decline by 25% to retest support at $0.74, while AVAX could drop 12% to retest support at $40.55
The cryptocurrency market has seen a steady decrease in the value of altcoins Cardano (ADA) and Avalanche (AVAX). Both coins have corrected by more than 7% and 8% respectively in the past week, leading to widespread speculation and concerns among investors. This blog post aims to delve into the reasons behind this decline and provide a comprehensive analysis of the situation.
Examining Cardano’s Recent Performance:
Cardano’s price has been on a downward spiral, correcting nearly 7% in the past week. This decline is not without reason. The altcoin’s price action on the weekly chart was rejected at the 50% price retracement level. This level was drawn from the November 2021 high of 2.37 to the December 2022 low of 0.23 at 1.30 during the first week of December. Since then, ADA has experienced a 20% decrease, trading at around 1.02 at the time of writing. If the correction continues, it could potentially extend the decline by 25% to retest its next weekly support at 0.74.
Analyzing Cardano’s Market Sentiment:
In addition to the price performance, market sentiment also plays a significant role in the coin’s trajectory. The long-to-short ratio of Cardano stands at 0.82, the lowest level in a month. This ratio, being below one, indicates a bearish sentiment in the market, with more traders betting on the asset price to decline. This sentiment strengthens ADA’s bearish outlook.
Avalanche’s Performance Overview:
Just like Cardano, Avalanche’s price has also seen a significant decline. The altcoin’s value has decreased by more than 8% in the past week. After surging by more than 120% since early November, AVAX faced resistance around the 55.76 level during the first week of December. Consequently, AVAX has declined by over 15% and is trading at 46.40 at the time of writing. If this downward trajectory continues, it could potentially extend the decline by 12% to retest its next weekly support at 40.55.
Assessing Avalanche’s Market Sentiment:
Similar to Cardano, Avalanche’s long-to-short ratio stands at 0.80, the lowest level in a month, indicating a bearish sentiment in the market. This ratio suggests that most traders are betting on a further decline in the asset price, which reinforces AVAX’s bearish outlook.
Conclusion:
The recent decline in the value of altcoins ADA and AVAX can be attributed to a variety of factors, including market sentiment and resistance levels. As the market continues to evolve, it is crucial for investors to stay informed and understand the factors influencing their investments. While the current outlook for both ADA and AVAX is bearish, only time will tell how these altcoins will perform in the future.
