This Long-Term Indicator Could Complicate Bitcoin's Price Recovery

A long-term price indicator has turned bearish for the first time in four years, threatening to impede continued gains in bitcoin's price.

Despite the rally late in the month, the cryptocurrency dropped 19 percent in May, according to Bitfinex data, pushing the 5-month moving average below the 10-month moving average for the first time since June 2014.

The bearish moving average crossover validates the argument that long-term bull market has ended and indicates scope for further losses.

The monthly chart also shows BTC fell below $7,698 - the 61.8 percent Fibonacci retracement of the rally from $162 to $19,891 - last month, bolstering the already bearish technical setup.

Bitcoin had to drop 19 percent in May to push the 5-month MA below the 10-month MA. So, it's likely the bears have run out of steam, at least for the short-term.

Bitcoin created another higher low as it recovered from the low of $7,414 yesterday.

The 50-candle MA has now shed bearish bias) and the RSI is above 50.00 and rising.

The price action, when viewed against the backdrop of Tuesday's bullish outside-day candle and the bullish price-RSI divergence, indicates scope for a rally to $7,818.

View The 5-month and 10-month MA bearish crossover has boosted the odds of a drop below the February low of $6,000.

Bearish scenario: Bitcoin could drop below $7,000 over the weekend if the cryptocurrency closes below the descending 10-day MA, currently located at $7,419.