Bitcoin drops as oil gains

The cryptocurrency was last down 0.3% to $78,255.1

Bitcoin on Wednesday had turned slightly lower in a wobbly session, amid a hit to risk sentiment from sliding U.S. bonds and higher oil prices.

The cryptocurrency was last down 0.3% to $78,255.1 by 20:43 GMT.

Crypto market participants have been focused on U.S. monetary policy following a blockbuster August jobs report last week.

Commenting on Bitcoin’s behaviour over the last two sessions, Iliya Kalchev, analyst at Nexo Dispatch, said: Open interest has ticked back up even as price drifts lower and spot selling continues, a combination that more often signals fresh short positioning than renewed conviction buying. That matters heading into Friday’s CPI – a hot print could extend the pullback, while a soft one would likely trigger short covering that amplifies the upside.

Risk sentiment came under pressure on Wednesday after the U.S. Treasury Department said it would buy back up to $6 billion in 10-year to 20-year maturities, up from $2 billion previously. The department last month said it would increase the buyback sizes to at least $4 billion.

U.S. stocks added to losses after the buyback announcement while yields soared as bonds were dumped.

Compounding Wednesday’s negative catalysts was oil. Brent crude futures, the international benchmark, topped $100 a barrel for the first time since May 26.

The advance came as military engagements between the U.S. and Iran showed no signs of ending, following a resurgence in such action last week for the first time since July. U.S. on Tuesday said it had attacked Iranian crude oil carriers in response to the targeting of a U.S. Navy warship by Iran.

The return to military action has come after a period of stalemate between the U.S. and Iran, as both sides wrestle for control over the Strait of Hormuz. Hopes for an imminent resolution to the fighting has faded.