The post Bitcoin Faces a Big Test As Hedge Funds Bet Against the Dollar appeared on BitcoinEthereumNews.com. Hedge funds are piling into one of their biggest anti-dollar bets in years, just as macro signals hint the USD may be nearing a rebound. If the crowded trade snaps, the ripple effects could hit crypto markets faster than investors expect. Sponsored Hedge Funds Build Extreme USD Shorts—A Repeatable Pattern? Hedge funds are aggressively shorting the US dollar, reaching one of the most lopsided positioning levels in two decades. The Positioning Index indicates that funds are deeply entrenched in “extreme short” territory, a zone that has historically preceded a USD recovery rather than a prolonged decline. Analyst Guilherme Tavares highlighted this setup, noting that the trade has become dangerously crowded. “Hedge funds are holding significant short positions in the DXY, and historically, similar levels have often preceded solid buying opportunities—at least for a short-term rebound. When a trade becomes too crowded, it’s usually worth considering the opposite side,” he wrote. Across the past 20 years, every major episode of heavy USD shorting has ended the same way: a dollar bounce that forces fast-money traders to unwind positions. Hedge Fund Exposure to DXY. Source: Tavares on X Sponsored Macro Tone Doesn’t Support the Anti-Dollar Hype A similar warning came from EndGame Macro, who pointed out that extreme short positioning rarely appears in calm markets. They explained that hedge funds are “shorting a weak dollar,” which historically makes the market more vulnerable to even a small shift in sentiment or liquidity. According to analysts, the broader environment is not as supportive of ongoing USD weakness as traders assume. Treasury markets are pricing future Fed cuts, growth is slowing, and dollar funding markets are tightening, all conditions that make sudden reversals more likely. “This setup doesn’t guarantee a major dollar bull run, but it does tell you that the downside is probably limited,”… The post Bitcoin Faces a Big Test As Hedge Funds Bet Against the Dollar appeared on BitcoinEthereumNews.com. Hedge funds are piling into one of their biggest anti-dollar bets in years, just as macro signals hint the USD may be nearing a rebound. If the crowded trade snaps, the ripple effects could hit crypto markets faster than investors expect. Sponsored Hedge Funds Build Extreme USD Shorts—A Repeatable Pattern? Hedge funds are aggressively shorting the US dollar, reaching one of the most lopsided positioning levels in two decades. The Positioning Index indicates that funds are deeply entrenched in “extreme short” territory, a zone that has historically preceded a USD recovery rather than a prolonged decline. Analyst Guilherme Tavares highlighted this setup, noting that the trade has become dangerously crowded. “Hedge funds are holding significant short positions in the DXY, and historically, similar levels have often preceded solid buying opportunities—at least for a short-term rebound. When a trade becomes too crowded, it’s usually worth considering the opposite side,” he wrote. Across the past 20 years, every major episode of heavy USD shorting has ended the same way: a dollar bounce that forces fast-money traders to unwind positions. Hedge Fund Exposure to DXY. Source: Tavares on X Sponsored Macro Tone Doesn’t Support the Anti-Dollar Hype A similar warning came from EndGame Macro, who pointed out that extreme short positioning rarely appears in calm markets. They explained that hedge funds are “shorting a weak dollar,” which historically makes the market more vulnerable to even a small shift in sentiment or liquidity. According to analysts, the broader environment is not as supportive of ongoing USD weakness as traders assume. Treasury markets are pricing future Fed cuts, growth is slowing, and dollar funding markets are tightening, all conditions that make sudden reversals more likely. “This setup doesn’t guarantee a major dollar bull run, but it does tell you that the downside is probably limited,”…