## What Awaits Ethereum? Hedge Funds Bet Against the Dollar as Next Week's Dollar Trend Creates Tension

The inverse correlation between the US Dollar Index (DXY) and cryptocurrencies remains one of the most reliable patterns in the market. When the dollar strengthens, risk assets like Bitcoin and Ethereum experience selling pressure. Conversely, a weak dollar typically sparks rallies in the crypto sector. Recent data reveal a concerning figure: hedge funds are holding record short positions against the dollar, suggesting a massive bet on its weakening. If this position reverses sharply, the consequences for ETH could be severe.

### The Extreme Stance of Hedge Funds Against the USD

Extremism in hedge fund positioning rarely ends well. When "hot money" concentrates in a single direction, reversals tend to be violent. In this case, millions of dollars are wagered on the dollar continuing to weaken. However, history suggests that such levels of concentration often precede unexpected market turns. For Ethereum holders, this presents a non-negligible risk to the bullish narrative many expect to develop in the coming months.

### DXY Breaks Key Resistance: Sign of Regime Change

The US Dollar Index has just crossed an important technical threshold: it surpassed its 200-day moving average for the first time in nearly nine months. This breakout marks the end of a long weakness phase that lasted 7-8 months. Traders recognize this move as potentially decisive. If the dollar manages to consolidate above these key levels, it could initiate an upward trend that would significantly pressure all risk assets, starting with cryptocurrencies.

### ETH at the Crossroads: $3.12K and Critical Decisions

Ethereum is currently trading near $3.12K, positioning itself in a crucial technical decision zone. The weekly chart shows the price holding just above a long-term upward trendline that has served as support during 2024 and 2025. This line forms the base of an expanding wedge pattern extending toward $4,000.

The main resistance remains at the $4,000 threshold, where bulls have been repeatedly rejected. A decisive break above this zone would open the way toward all-time highs, potentially reaching up to $4.95K. However, if the USD strength persists and the current support gives way, Ethereum could fall to the support zone of $2,300-$2,400, representing a nearly 25% drop.

### The Window of Opportunity Is Closing

For ETH holders, the coming weeks will be decisive. The dollar trend next week will be the dominant factor. If the USD continues to gain strength, pressure on Ethereum will be immediate and severe. Conversely, if hedge funds manage to defend their massive short positions, ETH could consolidate and prepare for an upward move from current levels. The key is to monitor whether the DXY maintains its position above the 200-day moving average.