US Bitcoin Premium Drops to -0.03% Amid Declining Institutional Activity

U.S. spot Bitcoin is trading cheaper than overseas markets, with institutional-only trading channels also seeing a significant decline. While the broader market remains relatively calm, crypto shows signs of weakened buying pressure.

As of 1:40 p.m. on September 20, according to TokenPost PRO, Coinbase Premium fell from -0.0801% on September 16 to -0.0893% on September 17 before narrowing to -0.0109% on September 18. It then remained negative for five consecutive days at -0.0198% on September 19 and -0.03% on September 20. A positive figure would indicate U.S. Bitcoin prices are higher than overseas, while a negative value means U.S. prices are cheaper.

Coinbase Prime (Coinigy data), the institutional-only trading channel, saw daily volume drop by 73.1% to 3,325.56 BTC on September 19 compared to 12,375.05 BTC on September 18, with a $381.2 million dollar-denominated 24-hour trading volume. This channel is where institutional investors actually buy and sell, so the sharp decline suggests reduced institutional activity.

The CME Bitcoin futures leverage fund positions as reported by the U.S. Commodity Futures Trading Commission (CFTC) on September 15 showed 5,545 longs versus 11,899 shorts, with shorts at 2.1 times the long position, indicating downward pressure.

The VIX index, measuring U.S. market volatility, stood at 14.81 as of September 18, down from 15.44 on September 17. A reading below 20 generally indicates calm markets, so current volatility isn't driving crypto weakness.

The dollar index was at 100.22 on September 18, unchanged from the previous day. U.S. 10-year Treasury yields were at 4.94% as of September 17. While a strong dollar or higher interest rates can weigh on risk assets like Bitcoin, today's limited dollar movement suggests crypto weakness is more attributable to spot discounts and declining institutional trading rather than macro factors.

The U.S. market currently appears more cautious than aggressive in buying, with the next key indicators being whether Coinbase Premium turns positive again and if Prime volume recovers.