The bond market, already under strain, took another blow following a disappointing auction of long-term U.S. Treasury debt, impacting risk assets including Bitcoin.
Bitcoin (BTC) surged to a fresh all-time high on Wednesday but hit strong resistance just shy of $110,000. After reaching a peak of $109,754, the cryptocurrency quickly dropped about 3%, slipping toward the $106,000 range. At the time of writing, Bitcoin was trading slightly above $107,000, showing modest losses over the past 24 hours, according to CoinDesk’s Bitcoin Price Index.
Other major cryptocurrencies also felt the pressure. Ether (ETH) and Solana (SOL) both edged lower despite an early rally on Wednesday.
The price dip is largely attributed to profit-taking after Bitcoin’s rapid ascent, which saw it gain nearly 50% in value over the past five weeks. Compounding this was fallout from a weak U.S. Treasury bond auction, which sent shockwaves through risk markets.
The U.S. Treasury’s sale of 20-year bonds faced tepid demand, pushing the 30-year Treasury yield to 5.07%, its highest in over two years.
The impact was swift: the Nasdaq dropped 1.5% within an hour of the news, while the S&P 500 fell 1.3%.
“This is a ticking time bomb that’s been swept under the rug,” said Josh Mandell, a former fixed-income expert turned Bitcoin analyst, ahead of the bond auction.
Mandell explained, “A ‘missed auction’—where bids don’t cover the offering—would be catastrophic. Without the Fed’s intervention, we’d already be facing a bond rollover failure, which could lead to default.”
Kirill Kretov, trading automation specialist at CoinPanel, noted that since late 2024, liquidity on crypto exchanges has diminished significantly, making markets thinner and more susceptible to sharp price swings.
“Structurally, Bitcoin has room for explosive gains,” Kretov said, “but the risk of a sudden correction is always present.”
The $110,000 price level has become a critical battleground for Bitcoin, according to prominent crypto trader Skew, who described it on X (formerly Twitter) as the key zone separating a local peak from a potential breakout.
Skew highlighted heavy supply concentrated around this level, with Binance perpetual futures showing a skewed ask order book and an accumulation of short positions.
“All signs point to a large liquidity cluster here, making this a pivotal market point,” Skew concluded.
