The stock market can offer valuable insights into possible Bitcoin (BTC) price movements this month, as big potential triggers are expected in the form of Q2 earnings’ numbers from some of the largest companies in the world. In July, several major companies will be releasing their earnings reports, including UnitedHealth, Citigroup, JPMorgan, Bank of America, Morgan Stanley, Tesla, Google, Apple, Meta, Microsoft, and Amazon.
These companies are part of the S&P 500, which collectively represent a market capitalization of $36.5 trillion. If the earnings season sustains modest growth, it is reasonable to expect a positive impact on Bitcoin’s price. This is because increased investor appetite for risk-on assets would likely reduce the odds of an imminent recession.
However, there is a level of uncertainty surrounding these earnings reports, with concerns that companies’ profitability could decline due to the unprecedented tightening of monetary policy by the U.S. Federal Reserve and macroeconomic concerns. Governments heavily rely on taxes from both companies and consumers, so a weak earnings season represents a serious threat to the overall economy.
Despite these concerns, the U.S. economy has shown resilience. For example, retail sales grew by 0.3% month-over-month in May, defying economists’ expectations of a decline. This growth in retail sales indicates that decreasing oil prices may be allowing consumers to spend more money on other goods.
Professional traders are utilizing the bullish “iron condor” strategy to maximize gains with limited risk if Bitcoin trades above $31,550 in July. This strategy involves buying Bitcoin futures during bull markets but using options strategies to manage the risk of liquidations when BTC’s price goes down.
The iron condor strategy consists of selling call and put options at the same expiry price and date. By adapting this strategy to the July 28 contracts, investors can target profits ranging from 3% to 24.5% above the current price of Bitcoin. Protective put options and call options are also included in the strategy to limit losses and provide downside protection or exposure to upside prices.
This skewed iron condor strategy can yield a potential net profit of 0.206 BTC ($6,290 at current prices) between $33,000 and $36,000, with profits remaining above 0.087 BTC ($2,655 at current prices) if Bitcoin trades in the $32,150 and $37,150 range. The maximum loss for this strategy is 0.087 BTC ($2,655), which would occur if Bitcoin trades below $31,000 on July 28.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making decisions.