Bitcoin unexpectedly rose by 8% in just three minutes earlier today as bullish sentiment begins to re-enter the cryptocurrency markets.

Following an abrasive daily candle close which saw Bitcoin suddenly drop from $7,300 to $7,100 yesterday evening, it consolidated today at $7,200 before surging towards the $7,800 level of resistance.

The dramatic rise from $7,200 to $7,800 saw a total of $59.71 million in short positions liquidated on derivatives exchange BitMEX, according to Datamish.

Price has now began to consolidate in the $7,500 region, which could fuel a continuation rally back to the $8,000 region.

However, the 100 exponential moving average (EMA) on the four-hour chart has been a bitter point of resistance on three occasions over the past month, and that level will need to be broken before an extended rally can take place.

The 100 EMA currently lies at around $7,600, while the 200 EMA is at $7,950.

It’s also worth noting that in addition to last month’s death cross, the 100 EMA is now sloping dangerously towards the 200 EMA, which could indicate that a further downside correction is on the cards.

If Bitcoin fails to break out above $8,000 over the coming weeks, it would mark another sinister lower high, which would suggest that the ongoing bear market is far from over and that downside price targets of $5,900 and $3,150 could well come into play.

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