Lack of Conviction in Institutional Bitcoin Investments; CPI and Iran Talks May Influence

Despite bitcoin's recent 7% price surge to $74,290.27, market conviction remains weak, with the recovery faltering near $72,000 due to impending binary risks, including the US inflation report and US-Iran truce talks. Institutions are adopting a cautious approach, evidenced by their options market activities, where they are pursuing upside potential through calls while also buying downside protection. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF (IBIT), indicating expectations of a price increase above the current $40. Similar trends are observed in bitcoin options on Deribit, with the $80,000 call being the most popular bet. However, the demand for puts, which provide protection against declines, persists. The options skew, measuring the price differential between calls and puts, remains negative across all time frames, revealing a lasting bias towards put options. The US consumer price index (CPI) for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices. This may lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate, potentially supporting the case for Fed rate increases and weighing on risk assets like BTC. The upcoming meeting between Iranian and US delegates in Pakistan may also impact financial market stability, with a potential end to the war and normalization of oil tanker traffic through the Strait of Hormuz likely to accelerate BTC's rally. The first signs of this could emerge from Hyperliquid-listed oil perpetual futures.