Lack of Conviction in Institutions' Bitcoin Positioning May Be Influenced by Upcoming CPI Report and Iran Talks

The price of bitcoin, currently at $74,055.83, has seen a 7% increase since Sunday, but the recovery has stalled near $72,000 due to key binary risks, including the upcoming US inflation report on Friday and the US-Iran truce talks over the weekend. Institutions are taking a cautious approach, as seen in the options market, where they are buying calls to bet on potential gains while also purchasing puts for downside protection. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating traders expect the price to rise above $40. Similarly, bitcoin options on Deribit have seen flows towards the $80,000 call, but demand for puts persists. The options skew, which measures the price differential between calls and puts, remains negative, indicating a lingering bias for put options. The US consumer price index for March is expected to show an 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 over the weekend will also be crucial for financial market stability, and a positive outcome could accelerate bitcoin's rally. Additionally, the ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a decrease in turbulence, indicating a green signal for crypto bulls.