Institutional Bitcoin Investment Lacks Confidence Amid Upcoming Economic Reports

The recent 7% surge in bitcoin's price to $70,895.60 has not been enough to establish strong market confidence, with the recovery stalling near $72,000 ahead of key economic events, including the upcoming US inflation report and US-Iran talks. Institutions are adopting a cautious approach, using call options to speculate on potential gains while also buying downside protection. According to QCP Capital, there is demand for the $45 call expiring in May, indicating expectations of a price increase above the current $40 level. However, the demand for puts, which provide protection against declines, remains steady, as reflected in the options skew, which shows a lingering bias towards put options. The US consumer price index for March is expected to show an increase in annualized inflation, led primarily by rising energy prices, which may lead to market volatility if the core figure exceeds estimates. The outcome of the US-Iran talks and the subsequent impact on oil prices will also be crucial in determining the stability of financial markets and the potential for bitcoin's rally to accelerate. Furthermore, the ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a decrease in uncertainty around inflation and interest rates, potentially indicating a green signal for crypto bulls.