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

Although bitcoin's price has seen a 7% increase since Sunday, the recovery has stalled near $72,000 due to key risks, including the upcoming US inflation report and US-Iran truce talks. Institutions are adopting a cautious stance, as seen in the options market, where they are buying calls while also seeking downside protection. According to QCP Capital, there is demand for the $45 call expiring in May, indicating expectations of a price rise above the current $40. Similarly, bitcoin options on Deribit have seen significant interest in the $80,000 call. However, the persistent demand for puts, which offer protection against declines, suggests a lingering bias towards caution. The US consumer price index for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices. This may lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized increase. The meeting between Iranian and US delegates in Pakistan may also impact 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 ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a decline in uncertainty, indicating a positive signal for crypto bulls.