Investor sentiment toward the US dollar has reached its lowest level in a decade. Previously, this was seen as a bullish signal for Bitcoin, but the current situation is anomalous.
Investor sentiment toward the US dollar has reached its lowest level in a decade. According to a February survey by Bank of America (BofA), the share of investments focused on the US currency has fallen to a record low since early 2012. Such an extreme bearish position is usually a classic bullish signal for Bitcoin, but 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 weaker dollar made the first cryptocurrency cheaper to buy and stimulated demand for risky assets, while a stronger dollar tightened financial conditions, putting pressure on the price of Bitcoin. However, since the beginning of 2025, this correlation has broken down, calling into question all historical parallels.
In 2025, the dollar index lost more than 9%. This year, it continued to decline and by February 17, it had fallen another 1% to 97.1. In January 2026, the DXY fell to a four-year low of 95.5. At the same time, Bitcoin not only failed to grow but also fell by 6% in 2025, and since the beginning of the year, its decline has amounted to 22% to below $68,000.
As a result, the 90-day correlation between the dollar and Bitcoin reached 0.6, 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 are moving in sync, while a coefficient of -1 means that they are moving in opposite directions.
Weakness of the dollar
If this new correlation persists, the further weakening of the dollar, which investors have been actively betting on, may not help Bitcoin, but rather continue to put pressure on it.
Back in mid-2025, many experts noted the weakness of the dollar as a potential factor that could positively affect the price of Bitcoin — at that time, the DXY was at roughly the same levels as it is now.
For example, CryptoQuant analysts saw potential for Bitcoin growth in the index dynamics, because in such conditions, investors tend to look for alternative investment options.
This point of view was supported by high-profile forecasts. Global Macro Investor analyst Julien Bittel cited 2015, 2020, and 2022 as examples, when similar movements in the dollar triggered a multiple increase in Bitcoin in the future. Against this backdrop, Bitwise Management predicted that Bitcoin would reach $200,000 by the end of 2025: Bitwise Chief Investment Officer Matt Hougan attributed the growth in part to the US government's policy of weakening the dollar.
Reverse side
But there is also a downside, as pointed out by InvestingLive chief analyst Eamon Sheridan. The record volume of short positions (bets on a decline) on 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), causing a rapid rebound in the DXY.
Following this, if the positive correlation between the DXY and Bitcoin continues, this rebound in the dollar could unexpectedly pull the price of BTC up with it.
Thus, the crypto market finds itself in a situation it has never experienced before. Extreme pessimism about the dollar, which historically promised a rally for Bitcoin, now carries the risk of a further decline due to the breakdown of historical patterns. But at the same time, it also promises the potential for unexpected growth, initiated by a reversal of the dollar itself, while maintaining the correlation between asset prices.