On the currency market, a paradoxical situation has developed: investor sentiment toward the US dollar has become one of the most negative in the past ten years. According to a February survey by Bank of America, the share of positions favoring the American currency dropped to its lowest level since early 2012.
Historically, such pronounced pessimism about the dollar was seen as a signal in favor of Bitcoin growth. However, in 2026 this mechanism broke down—and the market faced a rare anomaly.
Broken Correlation
For a long time, there was a stable inverse relationship between Bitcoin and the US Dollar Index — US Dollar Index.
– Weak dollar → increased interest in risk assets → capital inflow into cryptocurrencies.
– Strong dollar → tighter financial conditions → pressure on BTC.
This model worked for years. But since early 2025, the usual correlation began to break down.
In 2025, the dollar index lost more than 9%, and in January 2026 dropped to a four-year low of 95.5 points. As of February 17, the index stood at around 97.1. Seemingly, a favorable environment for the growth of digital assets.
However, Bitcoin followed a different scenario:
– by the end of 2025, BTC fell by about 6%;
– since the beginning of 2026, the decline reached 22%, with the price dropping below $68K.
Moreover, the 90-day correlation between DXY and BTC rose to 0.6 — the highest level since April 2025. This means the assets began moving in the same direction, rather than in opposite ones. For comparison: a value of +1 indicates complete synchronicity, −1 — mirrored movement.
Why dollar weakness no longer “works”
If the new positive correlation persists, further depreciation of the dollar may not support Bitcoin and instead be accompanied by its decline.
Even in the summer of 2025, many analysts considered dollar weakness a fundamental growth driver for the crypto market. For example, experts at CryptoQuant noted that when the American currency weakens, investors traditionally look for alternative instruments to preserve capital—including BTC.
This view was reinforced by bold forecasts. Global Macro Investor analyst Julien Bittel reminded of the 2015, 2020, and 2022 cycles, when periods of a weak dollar preceded multiple Bitcoin rallies.
Investment company Bitwise predicted $200K per BTC by the end of 2025. Chief Investment Officer Matt Hougan linked the potential rally in part to US government efforts aimed at softening currency dynamics.
But the market had other ideas.
Possible Trigger: A “Powder Keg” on the Currency Market
Chief analyst at InvestingLive Eamon Sheridan draws attention to the other side of the coin.
The record high volume of short positions on the dollar is creating an “overheated” situation. When most participants are betting on continued currency depreciation, any unexpected improvement in US macroeconomic data could trigger a sharp short squeeze — rapid closing of short positions and a DXY spike.
If the positive correlation between the dollar and Bitcoin persists, an atypical scenario may emerge: dollar strengthening could push BTC upward.
This entirely flips the previous model of market perception.
What Has Actually Changed?
The breakdown in the historical correlation may be explained by several factors:
1. Institutionalization of the crypto market.
Bitcoin is increasingly viewed as a macro asset, not a speculative alternative to the dollar.
2. Change in demand structure.
ETFs, funds, and large asset managers have increased the impact of global liquidity flows, not just currency dynamics.
3. Heightened sensitivity to global risks.
If the market sees dollar weakness as a sign of economic instability, it may weigh on risk assets, including BTC.
4. Shift in Bitcoin’s role.
It is increasingly traded in the same group as tech-sector stocks, rather than as an “anti-dollar.”
A New Phase for the Crypto Market
The cryptocurrency market has entered an unfamiliar phase.
Extreme pessimism toward the dollar—which once signaled a Bitcoin rally—now carries a dual effect. On one hand, if the current correlation persists, dollar weakness may continue to coincide with BTC declines. On the other hand, a sudden DXY reversal could become an unexpected growth catalyst.
Main takeaway: past historical parallels no longer guarantee scenario repetition. The market is entering a phase where macroeconomic dynamics and capital behavior matter more than familiar patterns.
This is precisely what makes the current situation especially interesting—and simultaneously more risky for investors.
