According to the survey, investors’ positioning in the U.S. dollar has fallen to its most negative level in more than a decade. The record net underweight reading indicates that markets are strongly pricing in further dollar weakness. Expectations of softer macroeconomic data and potential Federal Reserve rate cuts have been key drivers behind this shift.
Historically, a weaker dollar has supported risk assets. Bitcoin (BTC) typically showed an inverse correlation with the U.S. Dollar Index in previous cycles. However, since early 2025, this relationship has shifted. The 90-day correlation climbed to 0.60, signaling that the two assets have been moving in the same direction. Notably, both the dollar index and Bitcoin declined during this period.
If this new correlation structure persists, further dollar weakness may not automatically translate into gains for Bitcoin. Meanwhile, the buildup of record short positions against the dollar raises the risk of a potential short squeeze. In such a scenario, a sharp rebound in the dollar could also influence Bitcoin’s direction. Overall, the current positioning suggests that volatility may increase in both currency and crypto markets in the coming period.
