Dollar in Freefall: Crypto to the Moon or Just Another Wild Goose Chase?

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So, the US dollar is having a bit of a rough patch, you say? According to Bank of America’s foreign exchange and rates sentiment survey, everyone’s favorite green piece of paper is about as popular as a screen door on a submarine. Short positions are at their highest since January 2012, which is roughly the last time anyone felt optimistic about anything.

The US Dollar Index, that trusty barometer of how much the world cares about your currency, has taken a 1.3% nosedive year to date. It’s like watching a particularly dramatic episode of Survivor, but instead of contestants, it’s currencies, and instead of immunity, it’s just… more falling.

The Dollar: A 14-Year Low in Popularity, and No One’s Swiping Right

Bank of America’s latest survey reveals that dollar positioning in February hit its most negative level in over 14 years. Fund managers are treating the dollar like it’s a party invitation from 2025-they’re just not interested. Even Kevin Warsh’s nomination as Fed Chair in January 2026 couldn’t turn this ship around. It’s like trying to fix a leaky boat with a band-aid.

“Survey respondents see further signs of US labor market weakness as the main risk for a lower dollar,” WSJ reported. Because nothing says ‘confidence’ like a labor market that’s about as stable as a Jenga tower after a few too many margaritas.

The Labor market is NOT strong.

In the last 3 years, over 2.1 MILLION jobs were erased from the original BLS reports.

2023: -306,000 jobs
2024: -818,000 jobs
2025: -1,029,000 ( the largest single-year drop in at least 20 years )

Since 2019, roughly 2.5 million phantom…

– Bull Theory (@BullTheoryio) February 15, 2026

Meanwhile, the US Dollar Index is sliding faster than a penguin on a Slip ’N Slide. In 2025, it dropped 9.4%, and this year’s no better. On January 27, DXY hit 95.5, its lowest since February 2022. At the time of writing, it’s clawed back to 97.08, but let’s be honest, it’s like putting a bandage on a bullet wound.

DXY Chart: A rollercoaster ride with no seatbelts

DXY: Is It a Breakdown or Just a Dramatic Pause for Effect?

Market analysts are having a field day with technical signals pointing to further downside for the dollar. Trader Donny, who probably has a crystal ball hidden somewhere, predicts the index could dip below 96. “I’m seeing another bearish leg forming on the DXY,” he wrote, because nothing says ‘fun’ like financial jargon.

“I’m seeing another bearish leg forming on the DXY,” he wrote.

The Long Investor, meanwhile, is looking at charts that make the dollar’s future look about as bright as a black hole. He’s suggesting bearish targets in the 52-60 range by the 2030s. Because why stop at a decline when you can go full apocalypse?

$DXY chart that we first shared in July 2023

No changes and this is aligning with @RayDalio views for the next 7-10 years for the Dollar.

– The Long Investor (@TheLongInvest) February 16, 2026

But fear not! Some analysts are still holding out hope for a dollar rebound. The Macro Pulse thinks the index might be “bottoming out,” like it’s a reality show contestant finding their redemption arc. “My base case is a recovery toward 103-104 by July 2026,” they said, because why not add a little optimism to this financial soap opera?

“My base case is a recovery toward 103-104 by July 2026,” the post read.

Crypto: The Dollar’s Misery, Your Potential Windfall?

A weaker dollar usually means good things for risk assets, like cryptocurrencies. It’s like the dollar’s loss is Bitcoin’s gain, or so the theory goes. When the dollar takes a dive, investors start looking for lifeboats, and crypto is often the first one they spot. Bitcoin, in particular, loves to position itself as the hedge against monetary debasement, because who doesn’t love a good underdog story?

But let’s not get ahead of ourselves. The relationship between a weak dollar and crypto gains is about as predictable as a Douglas Adams plot twist. Broader macroeconomic conditions still call the shots. If a softer dollar is just a symptom of a slowing US economy or looming recession, investors might play it safe and stick to gold. Because let’s face it, gold’s been around since the dinosaurs, and it’s not going anywhere.

Recent data shows that bullish bets on gold are on the rise, which means a lot of people are still betting on the old reliable. So, while the dollar’s in freefall, the question remains: will crypto catch the wave, or will it just be another wild goose chase?

As the dollar continues its dramatic descent and fund managers keep their bearish hats on, the next few months will be a real test. Will crypto markets seize the moment, or will macro uncertainty keep them grounded? Stay tuned, because this financial drama is just getting started.

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2026-02-17 12:01