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

The bitcoin price, currently at $73,911.95, has seen a nearly 7% increase since Sunday but still lacks conviction, stalling near $72,000 ahead of significant binary risks, including the U.S. inflation report on Friday and the U.S.-Iran truce talks over the weekend. Institutions are adopting a cautious strategy, 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 for BlackRock's spot bitcoin ETF, indicating an expected price rise above the current $40. Similarly, the $80,000 call on Deribit has emerged as a popular bet, yet the demand for puts persists, reflecting a lingering bias for downside protection. The U.S. consumer price index for March is anticipated to show a significant increase in annualized inflation, primarily driven by rising energy prices due to the Iran war. This could lead to volatility, especially if the core figure exceeds the estimated 2.7% annualized rate, potentially supporting the case for Fed rate increases and impacting risk assets like bitcoin. The meeting between Iranian and U.S. delegates in Pakistan over the weekend could be crucial for financial market stability, with a potential end to the war and normalization of oil traffic through the Strait of Hormuz likely to accelerate bitcoin's rally. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in U.S. Treasury futures, has shown sharp spikes indicating rising uncertainty around inflation, interest rates, or macro shocks, but has recently dropped back, signaling a calmer bond market and a positive sign for crypto bulls.