Bitcoin Falls Back Quickly After Reaching New High, Fueled by Interest Rate Spike in Risk Assets

Bitcoin’s attempt to break past $110,000 stalled abruptly on Wednesday, leading to a swift pullback amid shaky U.S. Treasury market conditions.

After reaching an intraday peak of $109,754, Bitcoin dropped roughly 3%, retreating to around $106,000 before settling just above $107,000, per CoinDesk’s Bitcoin Price Index. Other major cryptocurrencies such as Ethereum and Solana also saw modest declines after earlier gains.

The selloff was partly driven by traders locking in profits after Bitcoin’s nearly 50% rally since its April lows. However, the immediate catalyst was a poorly received 20-year U.S. Treasury bond auction that sent long-term yields to their highest point in over two years.

The 30-year Treasury yield jumped to 5.07%, rattling risk-on assets. Following the auction, the Nasdaq plunged 1.5% and the S&P 500 fell 1.3% within an hour.

Josh Mandell, a former fixed-income specialist turned Bitcoin analyst, called the auction failure a “ticking time bomb” for financial markets. He warned that missed bond auctions threaten debt rollover capacity and could lead to defaults without Federal Reserve intervention.

Meanwhile, liquidity in crypto markets has thinned significantly since late 2024, according to Kirill Kretov of CoinPanel, heightening the potential for abrupt price swings.

“While Bitcoin’s longer-term outlook is bullish, the market remains vulnerable to sharp corrections,” said Kretov.

Crypto analytics firm Skew pinpointed $110,000 as a critical resistance level, with concentrated sell orders and an influx of short positions on Binance futures signaling intense market pressure.

“This price zone is pivotal — the clash between sellers and potential breakout buyers will shape Bitcoin’s near-term direction,” Skew said.