Lack of Conviction in Institutions' Bitcoin Positioning May Be Influenced by Upcoming CPI Report and Iran Talks

Despite a 7% rally in bitcoin's price since Sunday to $71,055.31, conviction remains weak due to the recovery stalling near $72,000 ahead of significant binary risks, including the upcoming U.S. inflation report and U.S.-Iran truce talks. Institutions are taking a cautious stance, chasing upside through call options while also buying downside protection. Demand for calls, particularly the $80,000 call on Deribit, indicates traders expect a price increase, but the persistence of demand for puts reveals a lingering bias for downside protection. The U.S. consumer price index for March is expected to show a marked increase in annualized inflation, led primarily by rising energy prices, which could lead to volatility if the core figure exceeds estimates. The outcome of the U.S.-Iran talks may also impact financial market stability and bitcoin's rally. Beyond these factors, the ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in U.S. Treasury futures, has shown a decrease in turbulence, potentially signaling a green light for crypto bulls.