Bitcoin is showing signs of softer U.S. demand, with its Coinbase premium falling to a four-week low as regulatory uncertainty and expectations for tighter monetary policy weigh on sentiment.

The decline in the premium comes after the Senate failed to advance the Clarity Act and as traders await the Federal Reserve’s interest-rate decision. Bitcoin was recently near $80,000 but has since pulled back toward $75,000.

The Coinbase premium measures the gap between bitcoin’s dollar price on Coinbase and its USDT-denominated price on Binance. CryptoQuant’s Coinbase Premium Index expresses that difference as a percentage of bitcoin’s price.

The index fell to about -0.07% on Tuesday, compared with roughly -0.02% one day earlier. With bitcoin trading around $75,900, the discount equates to approximately $50 between the two markets.

The size of the gap is relatively small, but its direction points to weaker buying activity from participants using Coinbase. The move also represents a shift from late August and early September, when the premium turned positive for the first time in months while bitcoin was climbing toward $80,000.

Fed Decision Could Add to Market Strain

Monetary policy is now another key factor for bitcoin traders.

The Federal Reserve is scheduled to announce its latest interest-rate decision later Wednesday. Markets are broadly positioned for a 25-basis-point increase, which would lift the federal funds target range to 3.75%-4%.

Higher rates can reduce borrowing and spending and help moderate inflation, but they cannot directly address an energy supply shock. As a result, tighter policy could slow demand without resolving the pressure coming from higher oil prices.

The increase in financing costs could also affect businesses investing heavily in artificial intelligence infrastructure, where large amounts of capital are required.

Oil Prices and Yields Remain Elevated

The energy market continues to add to inflation concerns. Brent crude is trading near $108 a barrel, while WTI is around $104 as tensions in the Middle East keep oil prices elevated.

Higher energy costs could make inflation more persistent and complicate the Fed’s policy outlook.

At the same time, the 10-year U.S. Treasury yield has climbed above 5%, tightening financial conditions further.

Together, the weaker Coinbase premium, the Clarity Act setback, elevated oil prices and rising Treasury yields are creating a more difficult environment for bitcoin and other risk-sensitive digital assets.