Bitcoin retreated to roughly $77,500, giving back part of its almost 25% August rally as higher U.S. Treasury yields and renewed tensions between Washington and Tehran increased pressure on risk assets.

The move is putting Bitcoin’s recent rally under scrutiny, with investors questioning whether the August advance reflected a lasting improvement in the cryptocurrency’s macro environment or was largely supported by declining bond yields that have since turned higher.

U.S. and Iranian forces exchanged fresh strikes overnight Tuesday as tensions surrounding the Strait of Hormuz intensified. President Donald Trump warned that Iran’s oil infrastructure could become a target, while Tehran threatened further attacks against U.S. bases located across the Gulf region.

The escalation pushed oil prices higher and revived concerns that an energy shock could add to inflationary pressures globally. Bond yields also climbed across Japan, Australia, the U.S. and Europe. At the same time, financial markets began assigning a greater likelihood to a Federal Reserve rate hike at its September meeting, even though inflation remains above the Fed’s 2% target.

Lower Treasury yields had been one of the key forces behind Bitcoin’s August gains. Rising yields can make speculative assets less appealing by increasing the relative attractiveness of interest-bearing investments, reversing some of the conditions that supported Bitcoin’s rally.

Strategy, the largest corporate holder of Bitcoin, resumed purchases after roughly two months without an acquisition. Yet the renewed buying failed to provide much of a cushion against the broader market decline, highlighting how strongly Bitcoin is currently responding to interest-rate and oil-market developments.

The weakness was also visible throughout the crypto market. Major tokens fell on Wednesday after posting substantial gains during August, with nearly all large cryptocurrencies losing ground against the dollar.

Solana and the TRUMP memecoin were among the biggest decliners, while BNB was relatively stable, slipping around 0.3%. The widespread decline across established cryptocurrencies and memecoins suggests investors are reducing exposure to risk more broadly rather than reacting to a problem with any particular network.

Attention now turns to Friday’s U.S. nonfarm payrolls report. The employment figures could influence expectations for the Federal Reserve’s next policy decision. A stronger labor market could give policymakers greater scope to keep rates elevated or raise them, potentially sending Treasury yields higher and adding to pressure on Bitcoin.

A weaker jobs report, by contrast, could lower expectations for a September rate increase and help pull bond yields lower. That could give Bitcoin some relief and recreate part of the backdrop that supported its August rally, although the outcome remains uncertain.

For the moment, Bitcoin’s direction is likely to remain closely linked to Treasury yields and oil prices. With geopolitical tensions increasing and global bond markets experiencing renewed selling, macroeconomic developments are overshadowing crypto-specific catalysts.