BCHUSD after being very bullish for a number of weeks, produced a bearish engulfing candle on the weekly chart. That is also at a monthly Fibonacci resistance level. The weekly price action suggests that the sellers might take control over the buyers on BCHUSD. Let’s have a look at the weekly chart.
The Weekly Chart
The level of 517.10 is a Fibonacci resistance level on the Monthly chart. Look at the arrowed candle. This is the candle which was produced last week. This is an engulfing candle closing below the last bullish weekly candle.
A bullish weekly candle right at the monthly resistance sends a strong message to traders. It may well end up producing a strong bearish trend on the weekly chart. Let us have a look at the daily chart to find out what message it holds for us.
The Daily Chart
The level of 387.45 is a strong level of support where the price reacted earlier. The level of 439.40, on the other hand, is the level of resistance. The resistance level has already produced an engulfing daily candle too. If a daily breakout takes place at the level of 387.45, then surely daily traders would love to go short and hold their entry up to the level of 310.00. This means the daily chart may belong to the sellers today.
The Bottom Line
Since the daily support level is still held, the buyers are still in the equation. However, the way intraday price action has been acting; it seems that a downward breakout is imminent. It goes without saying that an established daily bearish trend means it might create a weekly bearish trend over time. Yes, it has a long way to go, but the sellers have so many things in their favour to be hopeful.