Lack of Conviction in Institutional Bitcoin Positions; CPI and Iran Talks May Bring Clarity

Despite bitcoin's recent 7% price surge, conviction remains weak, with the recovery stalling near $72,000 ahead of key events, including the US inflation report and US-Iran talks. Institutions are adopting a cautious approach, chasing upside via call options while also buying downside protection. According to QCP Capital, options tied to BlackRock's spot bitcoin ETF show demand for the $45 call expiring in May, indicating expectations of a price rise above that level. Similarly, bitcoin options on Deribit have seen flows towards the $80,000 call, but demand for puts persists, revealing a lingering bias for put options. The US consumer price index for March is expected to show a marked increase in annualized inflation, led by rising energy prices. The core figure, which excludes food and energy, is estimated to be around 2.7%, but if it exceeds this estimate, it could further cement the case for Fed rate increases, potentially weighing on risk assets like BTC. The weekend meeting between Iranian and US delegates in Pakistan holds the key to financial market stability, and BTC's rally may accelerate if they find a way to end the war and normalize oil tanker traffic. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown sharp spikes in the past, indicating rising uncertainty around inflation, interest rates, or macro shocks. The index has recently dropped back to 74%, indicating calm in the world's most important bond market, a positive signal for crypto bulls.