Cryptocurrency markets are watching the US Presidential election closely, but Bitcoin’s price action is showing signs of decoupling from former President Donald Trump’s perceived chances, according to analysis from QCP Capital. While Trump’s recent interview on the Joe Rogan Experience podcast has boosted his odds on prediction markets like Polymarket to over 66%, Bitcoin’s correlation with these odds appears to be weakening.
Correlation Between Bitcoin Price and Trump’s Likelihood of Winning the Election is Declining
Historically, some analysts have referred to Bitcoin as the “Trump Trade,” suggesting a positive correlation between his political fortunes and the cryptocurrency’s price. However, despite the surge in Trump’s odds, Bitcoin’s performance this October has been relatively subdued. QCP Capital notes that Bitcoin is up only 8% this “Uptober,” significantly below the historical average of 21% for the month. Should current price levels hold, this October would mark Bitcoin’s fourth-worst performance in the past decade.
The cryptocurrency is currently battling the $70,000 resistance level, a key psychological barrier representing July’s highs. QCP Capital questions whether Bitcoin can break through this resistance in the lead-up to next week’s election results, expressing caution in the short term. They anticipate little market-moving news from Thursday’s Core PCE inflation data or Friday’s Non-Farm Payroll (NFP) employment figures.
However, the firm also points to a potential catalyst for a significant price move. Total Bitcoin perpetual futures open interest (OI) across exchanges is nearing $27 billion, approaching this year’s peak. This high level of open interest suggests a large amount of speculative positioning in the market. QCP Capital believes that a decisive break above $70,000 could trigger a cascade of leveraged long positions, potentially propelling Bitcoin to new all-time highs.
