Market conditions at a critical distance: how the Fed meeting and tech giants' reports will change the future of Bitcoin

On the horizon of the next trading session, two potentially destabilizing events coincide that will change the investment climate for both the U.S. securities market and the cryptocurrency sector. Analysts suggest that these factors will alter the already established market expectations, creating new opportunities and threats for different categories of traders.

The U.S. Market and Big Tech Companies: Why Is the Situation Changing?

The largest publicly traded U.S. companies, deeply integrated into the crypto ecosystem, will begin sequentially releasing their quarterly financial results the following evening. This calendar of corporate earnings traditionally has a significant impact on market sentiment and spills over into the crypto sector.

However, the current state of the U.S. stock market creates a paradoxical situation. Over the past few days, major indices have shown consistent growth, giving the impression that the market has already priced in most positive news. Therefore, even rapid financial report results may not trigger a substantial increase in quotes – the market simply will not have the motivation to move higher than the already established levels.

In contrast, weak reports will create asymmetric risk. If tech giants disappoint with their results, it could trigger a wave of profit-taking across the entire market. Thus, the scope for further growth is limited, while the threat of decline remains significant.

Federal Reserve Meeting and Rate Outlook

Alongside corporate earnings, American investors will face the Federal Reserve’s decision on interest rates. According to consensus among analysts, a rate cut at this meeting is unlikely – it is expected to hold steady at the current level.

This circumstance is important for understanding Bitcoin’s behavior. The currency has already undergone a significant correction over the past fourteen days, falling from previous highs. This decline has created a strong concentration of short positions held by speculators expecting further drops.

However, at the Fed meeting, an opposite scenario could unfold. Many traders holding short positions may lock in profits on the day of the meeting, especially if the central bank signals any future policy changes. Such a development could lead to a sudden short squeeze, resulting in a rapid rebound in quotes.

BTC Trend: Multiple Opportunities in a Period of Uncertainty

Bitcoin’s dynamics traditionally correlate with the U.S. stock market, especially influenced by the sentiment of large institutional players. Currently, BTC quotes stand at $72.98K, down 4.12% over the past 24 hours, reflecting a general risk appetite decline.

Considering the Fed’s policy and the presence of massive short positions, the short-term outlook does not look entirely negative. Although the probability of negative news from the U.S. market remains high, the crypto sector has already suffered significant losses. Pursuing a short position on the decline might be a short-sighted decision.

Conversely, if a sudden vertical sell-off of assets occurs, it could serve as an opportunity to realize profits from existing short positions rather than expanding exposure in this direction.

Practical Trading Strategy During Uncertainty

Recent trading experience shows that price fluctuations can be effectively monetized. The previous recommendation was to open short positions near the $89,000 level, which was successfully executed twice with profit-taking on both occasions.

The risk management scheme recommended for this period involves taking profits on part of the short positions at $87,000, and closing the remaining positions on the day of the Federal Reserve meeting. This tactic was developed a month ago, based on expectations of exactly such a development.

Active traders still have the opportunity to trade within the formed ranges. Long-term positions also require active management, as well as short-term ones, since the period of uncertainty demands constant monitoring of market changes and readiness for quick rebalancing of position exposures.