The Bitcoin price saw a moderate bounce on Tuesday, as the impending conclusion of tax season in the US suggests that an important source of sell pressure will be eliminated from the markets.
As CCN.com reported, many analysts attributed the first-quarter sell-off in part to the fact that traders and investors were forced to sell cryptocurrency holdings to cover tax liabilities incurred in 2017. By Tuesday evening, most tax returns will have been filed, so — aside from the few stragglers who may file for an extension — the market should see a prolonged respite from tax-based selling.
On Tuesday, the cryptocurrency market cap received a $5 billion bump and is currently valued at $331 billion. That works out to a single-day gain of about two percent.
The Bitcoin price traded sideways for the day but was forced to mount an intraday recovery after slipping as low as $7,900. At present, the Bitcoin price is $8,090 on Bitfinex, which translates into a $137.5 billion market cap. Notably, Bitcoin dominance has declined to 41.6 percent, which is its lowest point since mid-March.
So now that tax season is wrapping up, where does Bitcoin go from here? Fundstrat Global Advisors and Pantera Capital have both issued buy recommendations on the flagship cryptocurrency, arguing that it will broach a new all-time high before the end of the year.
The Ethereum price more or less held steady for the day as well, though it did manage to pad the gap between itself and the psychologically-important $500 level. At present, Ethereum is trading at $515 on Bitfinex, which gives the second-largest cryptocurrency a $50.8 billion market cap.
Large-cap cryptocurrencies may have struggled to achieve significant advances on Tuesday, but smaller-cap altcoins managed to recover from their early-week slump and post moderate gains.
Ripple and Bitcoin Cash each rose by about one percent, bringing their prices to respective values of $0.66 and $773. The Litecoin price, meanwhile, climbed by six percent to $134, which raised LTC’s market cap to nearly $7.6 billion.
Sixth-ranked EOS posted the most impressive gain among top 10-cryptocurrencies, leaping seven percent to $8.66.
Cardano and Stellar each climbed by five percent and are now valued at $0.25 and $0.29, respectively.
IOTA and NEO rounded out the top 10 with two percent gains, and each now boasts a market cap of approximately $4.5 billion.
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Last modified: March 4, 2021 5:06 PM