A further blow was dealt to the already pressured bond market after a lackluster auction of long-term U.S. Treasury debt was conducted.
A new all-time high was reached by Bitcoin (BTC) on Wednesday, but its upward momentum was abruptly halted just short of the $110,000 mark.
After a peak of $109,754 was reached, Bitcoin (BTC) experienced a swift decline of approximately 3%, dropping to the $106,000 range. At the time of reporting, the leading cryptocurrency was being traded slightly above $107,000, reflecting a modest decrease over the previous 24 hours, as indicated by the Bitcoin Price Index.
Other digital assets were impacted as well, with Ether (ETH) and Solana (SOL) both recording slight declines over the past 24 hours, even though gains had been observed during early Wednesday trading.
The price movement was likely driven by profit-taking after Bitcoin experienced a nearly 50% increase from its low approximately five weeks prior. Additionally, the downturn in risk assets was probably influenced by the broader impact of a poorly received U.S. Treasury bond auction.
A 20-year bond auction conducted by the U.S. Treasury Department attracted limited interest, resulting in a surge in the 30-year Treasury yield to 5.07%, marking its highest point in over two years.
Looming Debt Crisis Sparks Market Jitters
A sharp decline of 1.5% was recorded by the Nasdaq within an hour following the announcement, while a 1.3% drop was experienced by the S&P 500 during the same period.
The situation had been described as “a ticking time bomb, swept under the rug,” by Josh Mandell, a seasoned fixed-income expert turned Bitcoin analyst, before the disappointing bond auction took place that afternoon.
It was remarked by Josh Mandell that, “The potential catastrophe resulting from a ‘MISSED AUCTION’ in 30-year bonds used to be a serious topic of concern.” He explained that such an event refers to insufficient bids to fully cover the offering. According to Mandell, a default scenario would currently be unfolding due to the inability to roll over bonds—if not for the intervention of the Federal Reserve.
It was stated by Kirill Kretov, a trading automation specialist at CoinPanel, that a substantial amount of liquidity has been withdrawn from exchanges since late 2024. As a result, the market has been made thinner and more sensitive, causing Bitcoin’s price to become more susceptible to sharp fluctuations.
It was noted by him that, structurally, the potential for significant upward movement exists, although a sudden correction could occur at any time.
The $110,000 mark has been identified as a pivotal area within the current market structure, according to a post on X by widely followed crypto trader Skew. It was described by him as the crucial zone separating a local high from a possible breakout level.
According to Skew, a significant supply concentration has been observed at this price level, as indicated by a skewed ask-side order book and an accumulation of short positions on Binance perpetual contracts.
According to Skew, a substantial concentration of liquidity has been indicated at this level, which is typically considered pivotal for market movements.
