1. CME and Offshore Markets
2. Changes in Perpetual Funding Rates
3. September Drawdowns and Key Levels

Bitcoin's correlation with the S&P 500 has reached its highest in nearly two years, hitting 0.67, showing how broader economic issues are impacting both traditional and crypto markets.

CME and Offshore Markets

Futures premiums on the Chicago Mercantile Exchange (CME) have stayed flat, sticking near their lowest points of the year. The term structure is moderate and open interest hasn’t moved much this past week. Offshore, traders are still leaning bearish, with perpetual funding rates dropping to their lowest since March 2023. Rising open interest—now at levels not seen since July—paired with these negative funding rates, suggests the market could be setting up for some serious short squeezes. With FTX’s bankruptcy confirmation hearing coming up on October 7, repayments between $14.4 billion and $16.3 billion might start in the coming quarters.

Changes in Perpetual Funding Rates

Perpetual futures funding rates are showing signs of change. These rates have gone negative for the seventh time since January 2018, which could actually be a bullish sign. Historically, when the 30-day average funding rates go negative, the market often hits a bottom. The current pessimism among derivatives traders is accompanied by negative rates, which usually indicate increased sell orders in futures contracts.

September Drawdowns and Key Levels

September is traditionally a rough month for both traditional and crypto markets, and this year is no exception. Over the past five years, the S&P 500 has had an average drop of 5.21% in September. Recently, long-term holders have been showing increased readiness to sell. From a technical standpoint, Bitcoin is expected to trade between $52,000 and $63,000 throughout September. Positive news, such as mentions of crypto in debates, could push prices to $65,000.

Macro forces continue to exert significant influence on both cryptocurrency and traditional financial markets. Despite current bearish sentiment and high correlation with the S&P 500 index, there are potential opportunities for recovery and growth.