Institutions Lack Confidence in Bitcoin Price Despite Bullish Bets

Despite a 7% surge in bitcoin's price since Sunday, market conviction remains weak, with the recovery faltering near $72,000 ahead of key events such as the US inflation report and US-Iran talks. Institutions are adopting a cautious approach, buying call options to bet on price gains while also purchasing downside protection. According to QCP Capital, options for BlackRock's spot bitcoin ETF show demand for the $45 call expiring in May, while Deribit's bitcoin options have seen similar flows, with the $80,000 call being the most popular bet. However, demand for puts, which offer protection against declines, persists, as indicated by a negative options skew across all time frames. The upcoming US consumer price index (CPI) for March is expected to show a significant increase in annualized inflation, led by rising energy prices, which could lead to market volatility if the core figure exceeds estimates. The meeting between Iranian and US delegates in Pakistan also holds the key to financial market stability, with a potential end to the war and normalization of oil tanker traffic through the Strait of Hormuz likely to accelerate bitcoin's rally. The ICE BofA US Bond Market Option Volatility Estimate Index (MOVE) has shown a decrease in turbulence in US bonds, which could be a positive signal for crypto bulls.