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Bitcoin Backs Off Quickly From Record High as Interest Rate Surge Hits Risk Assets
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Krisztian Sandor
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By Krisztian Sandor, Tom Carreras|Edited by Stephen Alpher
May 21, 2025, 7:01 p.m.
- Bitcoin soared to a new record just below $110,000 on Wednesday, but price action quickly reversed.
- The turnaround came as profit-taking combined with a selloff in traditional risk assets on the heels of spiking interest rates.
Bitcoin’s
surge to afresh all-time recordon Wednesday ran into a brick wall just below $110,000.
After hitting a record of $109,754, BTC quickly fell to about 3% to the $106,000 area. At press time, the top cryptocurrency was trading just above $107,000 according to CoinDesk’s Bitcoin Price Index, modestly lower over the past 24 hours.
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Other cryptocurrencies took a hit as well, with ether
and solana
also slightly lower over the last day despite the early Wednesday run higher.
The reason behind the price action may be as simple as traders taking profits on the quick rise — bitcoin was higher by nearly 50% since bottoming about five weeks ago. Likely contributing was the ripple effect of a U.S. treasury bond auction going awry and hitting risk assets.
A sale of 20-Year bonds sold by the U.S. Treasury department saw weak demand, sending the yield on the 30-year Treasury spiking to 5.07%, its highest level in more than two years.
The Nasdaq tumbled 1.5% in just an hour shortly after the news, while the S&P 500 declined 1.3%.
“This is a ticking time bomb, swept under the rug,” said Josh Mandell, a longtime fixed-income veteran turned bitcoin analyst, prior to this afternoon’s poor bond sale.
“We used to talk about the disaster that would ensue if ever there was a ‘MISSED AUCTION’ in 30-yr bonds,” Mandell said. “A missed auction means that there were not enough bids to cover the offering… Were it not for the Fed, we would be experiencing a failure to roll over bonds right now which leads to default.”
Kirill Kretov, trading automation expert at CoinPanel, said that liquidity from exchanges has been significantly removed since late 2024, “making the market thinner and more reactive,” leaving bitcoin’s price vulnerable to wild swings.
“Structurally, there’s room for explosive upside,” he said, but “a sharp correction can happen at any moment.”
The $110,000 level has emerged as a key battleground in the current market structure, well-followed crypto trader Skew noted in an X post, describing it as the critical zone between a local high and a potential breakout point.
According to Skew, there’s a noticeable concentration of supply around this level, with Binance perpetuals showing a skewed ask-side order book and a buildup of short positions.
“All point to a huge amount of liquidity here, usually pivotal for the market,” Skew said.
Krisztian Sandor is a U.S. markets reporter focusing on stablecoins, tokenization, real-world assets. He graduated from New York University’s business and economic reporting program before joining CoinDesk. He holds BTC, SOL and ETH.
Tom writes about markets, bitcoin mining and crypto adoption in Latin America. He has a bachelor’s degree in English literature from McGill University, and can usually be found in Costa Rica. He holds BTC above CoinDesk’s disclosure threshold of $1,000.
