Bitcoin Lacks Strong Institutional Support Amid Upcoming Economic Indicators

The recent 7% surge in bitcoin's price to $71,038.77 has not been accompanied by strong conviction, as the recovery has stalled near $72,000 ahead of key events such as the US inflation report and US-Iran talks. Institutions are taking a cautious approach, buying call options to bet on potential gains while also purchasing downside protection. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating expectations of a price rise above the current $40. Similarly, bitcoin options on Deribit have seen significant interest in the $80,000 call. However, the demand for puts, which provide protection against declines, remains steady. The options skew, which measures the price difference between calls and puts, remains negative across all time frames, indicating a lingering bias towards put options. The upcoming US consumer price index (CPI) for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices. This could lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate, potentially supporting the case for Fed rate increases and weighing on risk assets like bitcoin. The meeting between Iranian and US delegates in Pakistan over the weekend will also be closely watched, as a positive outcome could lead to an acceleration of bitcoin's rally. Meanwhile, the ICE BofA US Bond Market Option Volatility Estimate Index (MOVE) has shown a decrease in volatility in US Treasury futures, which could be a positive signal for crypto bulls.