Bitcoin Retreats 3% After Hitting $109,754 All-Time High

Bitcoin's surge to a fresh all-time record on Wednesday encountered significant resistance just below $110,000. After reaching a peak of $109,754, the cryptocurrency quickly retreated by approximately 3% to the $106,000 range. At the time of reporting, Bitcoin was trading just above $107,000, showing a modest decline over the past 24 hours.

Other major cryptocurrencies also experienced a downturn, with ether and solana both slightly lower over the last day despite an early Wednesday surge. The price action can be attributed to traders taking profits following Bitcoin's nearly 50% rise since bottoming about five weeks ago. Additionally, the ripple effect of a U.S. Treasury bond auction going awry and impacting risk assets likely contributed to the decline.

A sale of 20-Year bonds by the U.S. Treasury department saw weak demand, causing the yield on the 30-year Treasury to spike to 5.07%, its highest level in over two years. This development had immediate repercussions on the broader market, with the Nasdaq tumbling 1.5% in just an hour and the S&P 500 declining 1.3%.

Analysts have warned about the potential risks associated with weak bond auctions. Josh Mandell, a fixed-income veteran turned bitcoin analyst, described the situation as a "ticking time bomb," highlighting the potential for a default if the Federal Reserve were not intervening. Mandell noted that a missed auction means there were not enough bids to cover the offering, which could lead to a failure to roll over bonds and subsequent default.

Kirill Kretov, a trading automation expert, pointed out that liquidity from exchanges has been significantly reduced since late 2024, making the market thinner and more reactive. This reduction in liquidity leaves Bitcoin's price vulnerable to wild swings. Kretov acknowledged that there is room for explosive upside but cautioned that a sharp correction could occur at any moment.

The $110,000 level has become a critical battleground in the current market structure. A well-followed crypto trader noted that this level represents a key zone between a local high and a potential breakout point. There is a noticeable concentration of supply around this level, with a skewed ask-side order book and a buildup of short positions, indicating a significant amount of liquidity that is pivotal for the market.