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

The price of bitcoin, currently at $74,165.37, has seen a 7% increase since Sunday but lacks conviction, stalling near $72,000 ahead of significant binary risks, including the US inflation report on Friday and US-Iran truce talks over the weekend. Institutions are adopting a cautious strategy, chasing potential gains through call options while also buying protection against declines. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating an expected price rise above the current $40. Similar trends are observed in bitcoin options on Deribit, with the $80,000 call being the most popular bet, yet demand for puts, offering downside protection, persists. The ongoing demand for protection is reflected in the options skew, which remains negative across all time frames, indicating a lingering bias towards put options. The expected increase in the US consumer price index for March, driven primarily by rising energy prices due to the Iran war, may lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate. This could further support the case for Fed rate increases, potentially impacting risk assets like BTC. The outcome of the US-Iran meeting in Pakistan will also be crucial for 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 be seen in Hyperliquid-listed oil perpetual futures. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown sharp spikes in March, indicating rising uncertainty around inflation, interest rates, or macro shocks, but has since dropped back, signaling a calm in the world's most important bond market and a positive sign for crypto bulls.