Despite a 7% rally in bitcoin's price since Sunday, market conviction remains weak, with the recovery stalling near $72,000 due to key binary risks, including the upcoming U.S. inflation report and U.S.-Iran truce talks. Institutions are adopting a cautious approach, chasing upside via calls while also buying downside protection.
According to QCP Capital, options tied to BlackRock's spot bitcoin ETF show demand for the $45 call expiring in May, indicating traders expect the price to rise above that level. However, demand for puts persists, revealing a lingering bias for put options. The U.S. consumer price index for March is expected to show a marked increase in annualized inflation, led primarily by rising energy prices.
The meeting between Iranian and U.S. delegates in Pakistan holds the key to financial market stability, and BTC's rally may accelerate if they find a way to end the war and normalize oil tanker traffic. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in U.S. Treasury futures, has shown sharp spikes in the index, indicating rising uncertainty around inflation, interest rates, or macro shocks.