Bitcoin gains momentum despite dollar strength as US election nears
Bitcoin’s (CRYPTO:BTC) traditionally inverse relationship with the dollar index (DXY) is being tested as the U.S. presidential election approaches, signaling potential shifts in market dynamics.
Historically, Bitcoin has moved in the opposite direction of the DXY, but current options data suggests this trend may change in the coming weeks.
As of now, options trading data from the Chicago Mercantile Exchange (CME) shows a bullish sentiment for Bitcoin.
The one-month 25-delta BTC risk reversals are at 1.20, reflecting a preference for call options over puts, indicating that traders expect Bitcoin’s price to rise.
Similar positive risk reversal values were observed on Deribit’s options contracts expiring around the election, further suggesting a bullish outlook for BTC.
Despite a steady dollar index hovering above 103, Bitcoin has already surged to nearly $68,000, its highest point since late July.
Meanwhile, the euro and pound options on CME show concerns about continued dollar strength, adding to the complexity of the upcoming market movements.
The recent bullish sentiment for Bitcoin is linked to growing odds of a Trump victory, seen as pro-crypto by many market participants.
"The upside convexity on a Trump win is worth being long," said Jonathan de Wet, Chief Investment Officer at Zerocap.
He emphasized that traders are building positions, anticipating further gains for Bitcoin, potentially reaching $70,000 in the coming weeks.
There has been a notable increase in call options at higher strike prices, with the $100,000 call option being particularly popular, boasting over $1 billion in notional open interest.
This surge in demand highlights the broader market optimism about Bitcoin’s upside potential.
FRNT Financial noted that the U.S. election has been a dominant factor influencing the crypto market.
Trump’s open support for cryptocurrencies, including specific policy proposals, contrasts with the less defined crypto stance under a potential Kamala Harris administration.
With the election approaching, the outcome could play a pivotal role in shaping Bitcoin’s trajectory in the near term.
At the time of writing, the Bitcoin (BTC) price was $67,171.82.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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