Institutions Lack Conviction in Bitcoin Positioning Amid CPI and Iran Talks

The recent 7% surge in bitcoin's price to $73,981.92 has not been enough to instill conviction, as the recovery has stalled near $72,000 ahead of key events such as the US inflation report and US-Iran truce talks. Institutions are adopting a cautious stance, as evident 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, indicating expectations of a price rise above the current $40 level. Similarly, bitcoin options on Deribit have seen significant interest in the $80,000 call. However, the persistent demand for puts, which offer protection against declines, is also notable. The options skew, which measures the price differential between calls and puts, remains negative across all time frames, indicating a lingering bias towards put options. The upcoming US consumer price index (CPI) for March is expected to show a marked increase in annualized inflation, primarily driven by rising energy prices. This could lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate, potentially cementing the case for Fed rate increases and weighing on risk assets like bitcoin. The meeting between Iranian and US delegates in Pakistan over the weekend will also be closely watched, as a resolution to the conflict could lead to increased stability in financial markets and potentially accelerate bitcoin's rally. The first signs of this could emerge through Hyperliquid-listed oil perpetual futures. The ICE BofA US Bond Market Option Volatility Estimate Index (MOVE), which reflects volatility in US Treasury futures, has shown sharp spikes in recent months, indicating rising uncertainty around inflation, interest rates, and macro shocks. However, the index has dropped back to 74% this month, signaling a return to calm in the bond market and a positive sign for crypto bulls.