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

Although bitcoin's price has surged nearly 7% since Sunday to $74,329.27, the recovery has stalled near $72,000 due to key binary risks, including the upcoming U.S. inflation report and U.S.-Iran truce talks. Institutions are adopting a cautious strategy, as seen in the options market where they are buying calls to bet on potential gains while also seeking downside protection through puts. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating an expected price increase. However, the persistent demand for puts and negative options skew across all time frames reveal a lingering bias for downside protection. The U.S. consumer price index for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices. This could lead to market 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 outcome of the U.S.-Iran talks may also impact financial market stability and bitcoin's rally. Additionally, the ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in U.S. Treasury futures, has shown a decrease in turbulence, potentially indicating a positive signal for crypto bulls.