Bank of America survey shows dollar bearish positions at a 10-year high — what that signals for bitcoin

Investor sentiment toward the U.S. dollar has turned sharply negative, with positioning hitting its most bearish level in more than a decade, according to Bank of America’s February fund manager survey — a shift that could inject fresh volatility into bitcoin.

The survey shows net exposure to the dollar has fallen to its lowest point since at least early 2012, marking a record underweight stance. Respondents cited concerns about a weakening U.S. labor market, which could push the Federal Reserve toward cutting interest rates.

Historically, bitcoin has tended to move inversely to the U.S. Dollar Index (DXY). As a dollar-denominated asset, bitcoin becomes cheaper for global buyers when the greenback weakens and more expensive when it strengthens. A firm dollar also tightens global financial conditions, often pressuring risk assets, while a softer dollar typically provides relief.

By that logic, extreme bearish positioning on the dollar would normally be viewed as a bullish tailwind for bitcoin. If investors are positioned for further dollar weakness, BTC could benefit — at least based on long-standing patterns.

However, recent price action complicates that narrative. Since early 2025, bitcoin has shown a positive correlation with the dollar. The DXY fell more than 9% last year and has slipped again this year, yet bitcoin has also declined, dropping 6% in 2025 and 21% year-to-date. Data from TradingView show the 90-day correlation between bitcoin and the dollar index recently climbed to 0.60, the strongest since April 2025.

If that positive relationship persists, further dollar weakness could coincide with additional downside in bitcoin — a reversal of the typical dynamic. Conversely, an abrupt rebound in the dollar could lift BTC alongside it.

Such a rebound could stem from a short squeeze. When bearish positioning becomes crowded, even a modest upside surprise can force traders to unwind their bets, driving the dollar sharply higher as they rush to cover positions. That move can amplify volatility across currency and risk markets.

“Record short positioning raises the risk of volatility in major USD pairs; downside may extend on weak U.S. data, but crowded trade dynamics increase potential for sharp short-covering rallies,” said Eamonn Sheridan, chief Asia-Pacific currency analyst at InvestingLive.

At the time of writing, the dollar index was up 0.25% at 97.13, while bitcoin traded near $68,150, down about 1%, according to CoinDesk data.

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