Lack of Conviction in Institutions' Bitcoin Positions; CPI and Iran Talks May Provide Clarity

The price of bitcoin, currently at $74,815.37, has seen a nearly 7% increase since Sunday, yet conviction in the market remains limited, with the recovery faltering near $72,000 ahead of crucial binary risk events, including the upcoming US inflation report and US-Iran truce talks. Institutions' cautious approach is reflected in the options market, where they continue to pursue upside potential through call options while also buying protection against potential declines. According to QCP Capital, there is demand for the $45 call expiring in May on BlackRock's spot bitcoin ETF (IBIT), indicating traders expect the price to exceed this level from its current $40. Similar trends are seen in bitcoin options on Deribit, with the $80,000 call being the most popular bet, although demand for puts that offer downside protection persists. The ongoing demand for protection against declines is also evident in options skew, which remains negative across all time frames, indicating a lingering 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, which may lead to market volatility if the core figure exceeds the estimated 2.7% annualized increase. The meeting between Iranian and US delegates in Pakistan over the weekend will be crucial in determining financial market stability, with a potential end to the war and normalization of oil tanker traffic through the Strait of Hormuz likely to accelerate bitcoin's rally. The first indications of this may come from Hyperliquid-listed oil perpetual futures. Beyond these events, the ICE BofA US Bond Market Option Volatility Estimate Index (MOVE), which reflects volatility in US Treasury futures, has shown swings in recent months, with sharp spikes indicating rising uncertainty around inflation, interest rates, or macro shocks. The index's recent drop to 74% after rising to 115% in March suggests that the global finance and collateral and credit creation are stabilizing, which could be a positive signal for crypto bulls.