Bitcoin’s recent surge hit a stumbling block just below $110,000 amid turbulence in the U.S. Treasury bond market, rattling risk assets across the board.

After climbing to an all-time high of $109,754 on Wednesday, Bitcoin (BTC) retraced roughly 3%, dipping toward $106,000 before stabilizing just above $107,000, according to CoinDesk’s Bitcoin Price Index. Other major cryptocurrencies, including Ether (ETH) and Solana (SOL), also faced slight pullbacks despite earlier gains.

The swift pullback was partly due to profit-taking following Bitcoin’s nearly 50% rally over the last five weeks. However, a weak U.S. Treasury auction compounded market uncertainty. The 20-year Treasury bond auction saw lackluster demand, driving the 30-year bond yield to 5.07%, its highest level in more than two years.

This development sent shockwaves through equity markets, with the Nasdaq plunging 1.5% and the S&P 500 dropping 1.3% shortly after the auction results.

Josh Mandell, a former fixed-income professional turned Bitcoin analyst, described the situation as a “ticking time bomb” that regulators have largely ignored.

“A missed auction means there aren’t enough bids to cover bond sales,” Mandell said. “Without Federal Reserve support, this scenario could trigger bond roll failures and potentially default.”

Kirill Kretov, an expert in trading automation at CoinPanel, pointed out that liquidity on crypto exchanges has thinned significantly since late 2024, increasing volatility and vulnerability to sharp price moves.

“Bitcoin still has potential for a strong breakout, but a sudden downturn could happen at any moment,” Kretov warned.

Technical observers note that the $110,000 mark represents a crucial resistance level. Crypto trader Skew highlighted a dense cluster of sell orders and increased short positions on Binance futures around this price point, signaling a key battleground.

“This level holds significant liquidity and will likely dictate whether Bitcoin breaks out or pulls back further,” Skew commented.

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