Despite a 7% rally in the bitcoin price to $73,162.68 since Sunday, conviction remains weak, with the recovery stalling near $72,000 ahead of key risks, including the US inflation report and US-Iran truce talks. Institutions are adopting a cautious approach, evident in the options market where they are buying calls while also seeking downside protection through puts. Demand for calls, such as the $80,000 call on Deribit, is high, but the demand for puts persists, indicating a lingering bias for downside protection. The US consumer price index for March is expected to show a significant increase in annualized inflation, which may lead to market volatility.
The outcome of the US-Iran talks may also impact financial market stability and potentially accelerate bitcoin's rally. The volatility in US Treasury futures, as reflected in the ICE BofA US Bond Market Option Volatility Estimate Index, has decreased, indicating calmer conditions in the bond market, which could be a positive signal for crypto bulls.