As the U.S. presidential election draws closer, Bitcoin’s historically inverse relationship with the dollar index (DXY) is under scrutiny. Market signals suggest that this long-standing dynamic may shift, with traders seeking upside exposure to Bitcoin (BTC) despite expectations of a stronger dollar.
Bullish Sentiment for Bitcoin, Despite Dollar Strength
- Options data from the Chicago Mercantile Exchange (CME) shows that one-month 25-delta BTC risk reversals—a measure of the premium paid for calls versus puts—currently stand at 1.20, indicating a bullish bias for Bitcoin over the next four weeks.
- A call option buyer is typically bullish, expecting the market to rise, while a put option buyer aims to hedge against downside risks.
Meanwhile, risk reversals on crypto options exchange Deribit for contracts expiring around the election date on November 8 also reflect a preference for calls, according to data from Amberdata.
In contrast, FX options on the euro-dollar (EUR/USD) pair—a key DXY component—show a bearish bias with a 30-day risk reversal value of -0.39, signaling continued dollar strength. Similar trends are evident in GBP/USD options.
BTC Defies DXY Trends, Hits Multi-Month High
Despite the dollar index holding steady above 103.00 and consolidating a 3% rise since late September, Bitcoin has surged to nearly $68,000—its highest level since July 29, according to TradingView data.
This divergence suggests that Bitcoin may be starting to decouple from the dollar index, a trend that could intensify as the U.S. election approaches.
Election-Driven Optimism Fuels BTC Upside Bets
Crypto liquidity provider Zerocap believes that the potential for an upside rally in Bitcoin—especially if pro-crypto Republican candidate Donald Trump gains ground—is “worth being long.”
“The upside convexity on a Trump win is worth positioning for,” said Zerocap’s Chief Investment Officer, Jonathan de Wet, in an email. He added, “We see BTC/USD targeting $70,000 in the coming weeks, driven by downside support and equities hitting new highs.”
Options markets have seen increased interest in BTC call options with strike prices at $80,000. Notably, the $100,000 call option has emerged as the most popular, boasting over $1 billion in open interest—a sign of mounting optimism.
Trump vs. Harris: Crypto Policy Uncertainty Looms
The U.S. election has become a dominant narrative within crypto markets. Donald Trump’s growing support, coupled with his pro-crypto stance and specific policy proposals, has bolstered bullish sentiment among traders.
In contrast, Kamala Harris’s stance on crypto policy remains ambiguous, leaving the market uncertain about what a Harris administration could mean for the sector.
“This uncertainty has made the election a focal point for crypto traders over the past six months,” noted FRNT Financial in a newsletter.
Conclusion
With the U.S. election looming and Bitcoin showing resilience in the face of dollar strength, traders are increasingly betting on upside exposure to BTC. As institutional players build positions, Bitcoin could surge to new highs, potentially breaking away from its long-standing inverse correlation with the dollar index.
