Investor sentiment towards the US dollar has reached its bleakest levels in the past decade. According to a February survey by Bank of America (BofA), the share of investments oriented towards the American currency has fallen to a record low since early 2012. Such an extreme bearish position is usually a classic bullish signal for $BTC , however, in 2026 the market faced an anomaly that calls this logic into question.
Historically, Bitcoin and the US dollar index (DXY) have moved in opposite directions. A weakening dollar made buying the first cryptocurrency cheaper and stimulated demand for risky assets, whereas a strengthening dollar tightened financial conditions, putting pressure on the price of Bitcoin. However, since the beginning of 2025, this correlation has broken down, casting doubt on all historical parallels.
In 2025, the dollar index lost more than 9%. This year it continued to decline and by February 17 had dropped another 1% to a level of 97.1. In January 2026, DXY fell to a four-year low of 95.5. At the same time, Bitcoin not only did not rise but also fell by 6% in 2025, and since the beginning of the year, its decline amounted to 22% to a mark below $68k.
As a result, the 90-day correlation between the dollar and Bitcoin reached a value of 0.60 — the highest level since April 2025. This means that, contrary to history, the assets are moving in the same direction. A coefficient of 1 means that the assets move synchronously, while minus 1 means they move in opposite directions.
Dollar weakness
If this new relationship holds, further weakening of the dollar, which investors have been actively betting on, may not help Bitcoin but rather continue to pressure it.
As early as mid-2025, many experts noted the weakness of the dollar as a potential factor that could positively influence the price of Bitcoin — at that time, DXY was at roughly the same levels as it is now.
For example, analysts at CryptoQuant have seen potential for Bitcoin's growth in the dynamics of the index, as investors tend to seek alternative investment options under such conditions.
This viewpoint was supported by loud predictions. Global Macro Investor analyst Julien Bittel cited 2015, 2020, and 2022 as examples when similar movements of the dollar provoked a multiple increase in Bitcoin in the future. Against this backdrop, there were forecasts from the investment firm Bitwise of $200k for Bitcoin by the end of 2025: Bitwise's investment director, Matt Hougan, linked the rise, among other factors, to the US government's policy aimed at weakening the dollar.
The downside
But there is also a downside, as pointed out by InvestingLive's chief analyst, Iman Sheridan. The record volume of short positions (betting on a decline) in the dollar creates a "powder keg." Any unexpected positive signal from the US economy could trigger a sharp closure of these short positions (a so-called short squeeze), leading to a rapid bounce in DXY.
Following this, if the positive correlation between DXY and Bitcoin holds, this bounce of the dollar could unexpectedly pull up the price of BTC.
Thus, the crypto market finds itself in a situation it has not been familiar with before. Extreme pessimism about the dollar, which historically promised rallies for Bitcoin, now, due to the breakdown of historical patterns, carries risks of further decline. But at the same time, it also promises potential for unexpected growth initiated by a reversal of the dollar itself, while maintaining the correlation between asset prices.