BofA: Bets against US dollar at highest since 2012, raising BTC volatility risk

Investor positioning on the U.S. dollar is at its most bearish level since 2012, according to a February Bank of America survey reported by CoinDesk. While a weaker dollar has historically been a bullish signal for risk assets like Bitcoin (BTC), analysts note a recent shift in this dynamic. Data from TradingView indicates that the 90-day correlation coefficient between BTC and the U.S. Dollar Index (DXY) has climbed to 0.60, suggesting the two assets have been moving in tandem in 2025. This positive correlation implies that a further decline in the dollar could negatively impact BTC, whereas a sharp rebound driven by a short squeeze could coincide with a rally in the cryptocurrency. Eamonn Sheridan, an APAC currency analyst at InvestingLive, noted that the record short positioning increases the risk of heightened volatility in major dollar currency pairs.