Bitcoin fell more than 2% over 24 hours, recently trading at $77,208 after reaching a low of $76,748, as oil rose above $105 a barrel amid renewed Middle East tensions. Iran signaled it would not back down against U.S. forces, while Tehran-backed Houthis in Yemen struck Saudi Arabian assets after some of the heaviest fighting since the war began in February. Higher oil prices add to inflation pressure and reduce expectations for interest-rate cuts, a challenging backdrop for Bitcoin, which has generally performed better when borrowing costs are low and has sold off when the Federal Reserve turns more hawkish. Traders are now pricing in a rate hike next week. The market is also focused on affordability concerns ahead of the U.S. midterm elections, with U.S. President Donald Trump saying prices will come under control and Federal Reserve Chair Kevin Warsh saying inflation has not fallen enough. Bitcoin nevertheless had one of its strongest August rallies after the U.S. Treasury said it would at least double liquidity-support buyback operations as borrowing costs surged. That announcement weakened the dollar and benefited non-yielding assets such as Bitcoin and gold, reinforcing Bitcoin's closer recent trading relationship with gold and the appeal of the so-called debasement trade as investors hedge against dollar weakness.