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

Although bitcoin's price has risen nearly 7% since Sunday to $74,738.22, the recovery has been hindered near $72,000 due to upcoming binary risks, including the U.S. inflation report on Friday and U.S.-Iran truce talks over the weekend. Institutions are adopting a cautious strategy, as seen in the options market where they are buying call options to speculate on potential gains while also purchasing put options for protection against potential losses. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF (IBIT), indicating expectations of the price rising above $40. Similarly, bitcoin options on Deribit have seen interest in the $80,000 call. However, the demand for puts, which provide protection against declines, remains steady. The price differential between calls and puts, measured by options skew, is negative across all time frames, indicating a persistent bias towards put options. The U.S. consumer price index (CPI) for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices due to the Iran war. If the core figure exceeds the estimated 2.7% annualized rate, it could lead to increased expectations of Fed rate hikes, potentially negatively impacting risk assets like bitcoin. The meeting between Iranian and U.S. delegates in Pakistan over the weekend will be crucial for financial market stability, and a positive outcome could accelerate bitcoin'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 (MOVE), which reflects volatility in U.S. Treasury futures, has shown swings in recent months. A spike in the index indicates rising uncertainty around inflation, interest rates, or macro shocks, often coinciding with tighter financial conditions and risk-off sentiment in equities, credit, and crypto markets. After rising to 115% in March, the index has dropped back to 74% this month, signaling calmer conditions in the bond market, which could be a positive sign for crypto bulls.