Investing.com – Bitcoin traded in a tight range Wednesday as traders contemplated whether the popular digital currency's support at current levels would hold or whether further downside pressure was yet to come.
Bitcoin rose 0.61% to $6,881.9 on the Bitfinex exchange, as trading was restricted to a narrow $240 range. Bitcoin hit a high of $7,017 on Wednesday.
The narrow trading range comes amid an increase in efforts to curb crypto-related activity as regulators announced measures to limit crypto-related activity.
The Reserve Bank of India last week ordered regulated entities to unwind their positions with individuals or business dealing in cryptocurrencies.
While the Spanish Treasury’s investigation to crackdown on tax evading and money laundering crypto investors, resulted in the arrest of 11 individuals for laundering more than 8 million euros using cryptocurrencies, according to a Europol press release April 9.
Others, meanwhile, cited the upcoming U.S. tax deadline as one of the headwinds forcing traders to sell their bitcoin holdings as they seek to raise funds to pay taxes on capital gains following the spectacular rise in the price of bitcoin seen last year.
Thomas Lee, head of research at Fundstrat Global Advisors said last week in a report that the upcoming April 17 tax filing deadline could lead to massive “selling” of bitcoin. U.S. households likely owe $25 billion in capital gains taxes for their cryptocurrency holdings, Lee added.
Despite the current negative sentiment on bitcoin, it has yet to test its February 6 low of $6,000 and appeared somewhat supported at current price levels as the slump in the total cryptocurrency market cap steadied in recent days.
The total market cap of cryptocurrencies rose to about $269 billion, at the time of writing, from about $264 billion on Tuesday.
At the turn of the year, the total cryptocurrency market cap was well above $800 billion. Barclays estimated Tuesday, however, the total cryptocurrency market cap would struggle to rise above $780 billion.
Ripple XRP rose 2.27% to $0.50190 on the Poloniex exchange, while Ethereum rose 2.37% to $420.72.