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

Despite a 7% price increase since Sunday, bitcoin's recovery has stalled near $72,000 due to key binary risks, including the upcoming US inflation report and US-Iran truce talks. Institutions are adopting a cautious strategy in the options market, chasing upside potential through call options while also buying put options for downside protection. Demand for the $80,000 call option has emerged as a popular bet, but the persistent demand for puts indicates a lingering bias for protection against declines. The US consumer price index for March is expected to show a significant increase in annualized inflation, led by rising energy prices. The core figure, which excludes food and energy, may further cement the case for Fed rate increases, potentially impacting risk assets like bitcoin. The outcome of the US-Iran talks may bring stability to financial markets, and a positive result could accelerate bitcoin's rally. The ICE BofA US Bond Market Option Volatility Estimate Index has dropped to 74% after a sharp spike in March, indicating calmer conditions in the US bond market and a potential green signal for crypto bulls.