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(Bloomberg) -- Relentless dollar-selling is starting to look like a bubble — and, like all bubbles, it will eventually pop, according to HSBC Holdings Plc strategists.

Traders appear to be fixated on the dollar’s steep decline this year, and tempted to extrapolate that to future performance, HSBC strategists led by Paul Mackel wrote in a research note. That’s symptomatic of “bubbly-like” behavior, they said.

“It was not long ago that a strong USD bubble was evident, but the opposite is occurring: an ‘anti bubble’ of sorts,” the strategists wrote. “‘Bubbly-like’ characteristics exist, which is a warning sign that a USD bottom may not be far away.”

The Bloomberg Dollar Spot Index has tumbled more than 8% this year as aggressive US tariffs and their chaotic rollout raised questions about the stability of the world’s reserve currency. HSBC sees dollar softness continuing in the coming months, but arguments for more significant downside had become “overly one-sided,” the strategists said.

While uncertainty about US policies eroded the dollar’s haven status and added to the “de-dollarization” theme, the degree to which they warrant further selling has diminished since President Donald Trump first announced wide-ranging tariffs in April, the strategists said.

A return to a more conventional framework in which the dollar is correlated to US yields could signal that a bottom to the dollar’s weakening trend is approaching, they said, adding that a similar correlation between US equities and yields was showing signs of picking up.

On the other hand, the dollar decline could gather momentum if US policy uncertainty “turns problematic once more” or the global economy begins to accelerate. While neither is the bank’s base case, “we need to be aware of the risks,” they said. Replacing Federal Reserve Chairman Jerome Powell and the euro’s outperformance could be possible triggers, they added.

“While we think through some downside scenarios to the USD, we must be cognizant of what could mark the end of the currency’s decline,” Mackel and his team wrote. “In our view, an ‘anti-USD bubble’ has been forming. Although it is not ready to pop, bubbles do eventually.”