Bitcoin longs rise as Brent tops $100 before CPI

Bitcoin traders added leveraged long exposure as Brent crude climbed above $100 and the token traded around $78,451, with markets focused on the US August Consumer Price Index due Friday at 8:30 a.m. ET.

Brent touched $100.19 after a run of roughly 25% since early August driven by attacks on shipping and energy infrastructure that raised supply concerns in the Strait of Hormuz and the Red Sea. The US 10-year Treasury yield moved toward 4.81% as investors weighed higher energy costs. Markets priced a roughly 60.4% probability of a 25 basis-point Federal Reserve hike at the next meeting.

Research covering digital assets found that Bitcoin’s 90-day correlation with gold rose to 0.56, its highest level since 2020, while correlations with the Nasdaq 100 and the US dollar declined toward zero. Analysts observed the pattern during episodes when Bitcoin tracked scarce monetary assets more closely than technology stocks. The same research highlighted that elevated real yields limit the Federal Reserve’s ability to ease policy and represent a key vulnerability for Bitcoin.

Data from the September 4 payrolls report showed the US added 162,000 jobs versus forecasts of 56,000. Bitcoin fell 2.32% in the 30 minutes after the release. Open interest in derivatives fell about 3% in the same window, with roughly $119 million of long positions liquidated and about $24 million of short liquidations recorded.

Executives in crypto trading firms reported leverage has been rebuilding, though it remains below prior peaks. Most current derivatives positions are long, which increases the market’s exposure to sudden downside moves if macro data or yields shift sharply.

Market strategists flagged channels that could push global yields higher. Renewed Chinese oil purchases were cited as a factor that could keep crude prices elevated, raise Japan’s import bill and put pressure on the yen. That pressure could prompt Japanese investors to reduce Treasury holdings if authorities intervene to support the currency. An investment bank estimated that a wider escalation of attacks on Middle Eastern vessels could push crude toward $120 per barrel, while normalization of regional exports could see prices move closer to $80.

Core consumer inflation for August is expected to cool to 2.4% year over year from 2.5% in July. The August CPI report largely predates Brent’s latest rise above $100, so its immediate effect will transmit through updates to rate expectations rather than capturing most of the recent energy shock.

Bitcoin remained in the upper $70,000s while oil, yields and higher odds of another Fed increase were in place. Traders and analysts say the CPI release is the next major data point for markets that have sizable leveraged long positions in cryptocurrency derivatives.