The Federal Reserve and US stock earnings are closely related. Recent Bitcoin trend analysis

For cryptocurrency investors, the movement of the US stock market has always been closely related to market trends. This is because the correlation between the crypto market and traditional financial markets is becoming increasingly evident, especially when it comes to Federal Reserve policies and tech stock performance. Recent market conditions clearly reflect this—multiple factors stacking up have made Bitcoin’s outlook uncertain.

Limited Impact of Tech Earnings Reports, Market Has Already Priced in Most Positives

The quarterly earnings reports of major US tech companies are about to be released intensively, which should be a major market-moving event. However, in reality, the market has already experienced a continuous rebound ahead of these reports, mainly because investors have priced in most of the positives. This means that even if the earnings perform strongly and data exceeds expectations, the upside potential for stocks is actually quite limited.

On the other hand, risks are quite the opposite. If earnings show weakness or fall short of expectations, any minor flaw could trigger profit-taking and sell-offs. When market sentiment is fragile, small issues can be amplified infinitely. Therefore, from a probabilistic perspective, the upside space brought by these earnings reports is quite limited, but the downside risk of a decline is extremely significant.

Federal Reserve Policies and Cryptocurrency Prices Are Interconnected; Pre-emptive Declines Have Already Released Risks

Bitcoin’s trend generally remains synchronized with the US stock market. Ahead of the Federal Reserve rate decision, the market has already reacted in advance, with BTC experiencing a noticeable decline over the past two weeks. This pre-emptive drop is actually a form of risk release—many short sellers and traders have already taken profits during this decline.

The Fed’s policy stance (especially regarding whether to cut interest rates) has a profound impact on Bitcoin prices. Since the market has already digested tightening expectations, when the actual rate decision is announced, many short positions will choose to take profits at this point, locking in gains. This creates an interesting market dynamic—earnings reports may bring negative signals, but Fed rate decisions could trigger short covering, with both forces counterbalancing each other.

Profit-Taking Strategies Are Superior to Shorting, and Swing Trading Remains Key

Although there is a relatively high probability of negative surprises from US earnings reports, considering that the crypto market has already declined significantly in advance, blindly shorting at this point is not the best approach. Instead, if the market experiences a quick rebound or bottoming out, that can be an excellent opportunity for profit-taking—allowing previous short positions to lock in gains.

A mature trading strategy should involve scaling out in stages. Take partial profits at support levels (such as around $87,000), and keep some positions open to wait for the Fed rate decision before executing a second round of profit-taking. This step-by-step approach to locking in profits can both mitigate risk and seize opportunities arising from subsequent market variables.

Meanwhile, short-term swing trading opportunities still exist. During periods of increased market volatility, agile traders can find multiple entry and exit points. Whether managing long-term positions or capturing short-term swings, dynamic adjustments based on Fed decisions and earnings progress are essential. These moments, closely tied to market developments, test traders’ discipline and strategic execution.