Bitcoin struggles to hold above $16,000; crypto marketplace Coinbase reports transaction delays

Bitcoin rallied Tuesday, recovering from a sharp sell-off late last week.

The digital currency briefly climbed more than 12.5 percent to above $16,100 late Tuesday morning and was trading near $15,965 late in the afternoon, according to Coinbase, the leading U.S. platform for trading major digital currencies.

However, Coinbase said on its status website at 1:24 p.m., ET, that "Due to high volume, we are experiencing a backlog of outgoing transactions for BTC and ETH. ... Outgoing transactions of BTC and ETH may be delayed by several hours."

The issue remained unresolved more than three hours later, according to the website.

With Tuesday's gains, bitcoin has now recovered more than 50 percent from a low of $10,400 hit Friday in an extremely volatile day of trading that had no immediately apparent explanation behind it. Trading on Coinbase was also down for more than two hours during Friday's sell-off.

Nolan Bauerle, director of research at CoinDesk, attributed much of Tuesday's price recovery to improved access to buying cryptocurrencies.

"After last week's sell-off, order books got some breathing room," Bauerle said in an email to CNBC. "Those that wanted to buy at all-time highs suddenly saw discounts and more importantly could actually buy from exchanges that worked through the backlog."

Bitcoin has soared more than 1,600 percent over the last 12 months, according to Coinbase. A surge of investor interest has helped turn the once-fringe item to an object of Wall Street's attention. CME, the world's largest futures exchange, and its competitor Cboe both launched bitcoin futures this month. Many see the launch as a step towards legitimizing bitcoin as an asset class for institutional investors.

The CME bitcoin futures expiring in January settled nearly 11.7 percent higher at $15,785, and the Cboe bitcoin futures settled up 13.3 percent at $15,810. Trading volume in the Cboe January contract was above 2,300, while the CME equivalent was near 2,000, according to their websites.

Ethereum traded 0.6 percent higher near near $770, down about 12.6 percent from its record high of $881.44 hit Thursday, according to CoinMarketCap.

The bitcoin offshoot, bitcoin cash, traded more than 1 percent lower near $2,806, according to Coinbase.