Lack of Conviction in Institutional Bitcoin Positions

Despite a 7% surge in bitcoin's price since Sunday to $75,271.98, conviction remains weak due to the recovery stalling near $72,000 ahead of key binary risks, including Friday's U.S. inflation report and U.S.-Iran truce talks. Institutions are taking a cautious approach, evident in the options market where they continue to pursue upside potential via calls while also buying downside protection. According to QCP Capital, options tied to BlackRock's spot bitcoin ETF show demand for the $45 call expiring in May, indicating expectations of a price rise above the current $40 level. Similarly, bitcoin options on Deribit have seen flows towards the $80,000 call, but demand for puts offering downside protection persists. The U.S. consumer price index for March is expected to show a marked increase in annualized inflation, led primarily by rising energy prices, which could lead to market volatility if the core figure exceeds estimates. The weekend meeting between Iranian and U.S. delegates in Pakistan will be crucial for financial market stability, and a potential end to the war could accelerate bitcoin's rally. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in U.S. Treasury futures, has shown sharp spikes indicating rising uncertainty around inflation, interest rates, or macro shocks, but has recently dropped back to 74%, signaling calm in the world's most important bond market and a positive sign for crypto bulls.