A further blow was dealt to the already pressured bond market after a lackluster auction of long-term U.S. Treasury debt was conducted.
Bitcoin (BTC) reached a new all-time high on Wednesday, but its upward momentum stalled just before hitting the $110,000 mark.
Bitcoin (BTC) peaked at $109,754 before swiftly declining by about 3%, falling into the $106,000 range. At the time of reporting, it traded slightly above $107,000, showing a modest 24-hour decrease, according to the Bitcoin Price Index.
Other digital assets also felt the impact, as Ether (ETH) and Solana (SOL) posted slight declines over the past 24 hours, despite recording gains during early Wednesday trading.
Profit-taking likely drove the price movement after Bitcoin surged nearly 50% from its low around five weeks earlier. Additionally, a poorly received U.S. Treasury bond auction likely influenced the broader downturn in risk assets.
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
The Nasdaq sharply declined by 1.5% within an hour of the announcement, while the S&P 500 dropped by 1.3% during the same period.
Josh Mandell, a seasoned fixed-income expert turned Bitcoin analyst, described the situation as “a ticking time bomb, swept under the rug” before the disappointing bond auction took place that afternoon.
Josh Mandell remarked, “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.
Kirill Kretov, a trading automation specialist at CoinPanel, stated that since late 2024, traders have withdrawn a substantial amount of liquidity from exchanges. This shift has thinned the market and increased its sensitivity, making Bitcoin’s price more vulnerable to sharp fluctuations.
He noted that, structurally, the market holds strong potential for significant upward movement, though a sudden correction could still happen at any moment.
Widely followed crypto trader Skew identified the $110,000 mark as a pivotal area within the current market structure in a post on X. He described it as the crucial zone that separates a local high from a potential breakout level.
According to Skew, traders have concentrated significant supply at this price level, as reflected in the skewed ask-side order book and the buildup of short positions on Binance perpetual contracts.
Skew noted that traders have concentrated substantial liquidity at this level, which typically plays a pivotal role in driving market movements.
