Institutions Show Limited Confidence in Bitcoin Despite Price Increase

The recent 7% surge in bitcoin's price to $74,995.64 has not been enough to inspire confidence, as the recovery has stalled near $72,000 ahead of key events such as the upcoming US inflation report and US-Iran talks. Institutions are adopting a careful strategy, using call options to speculate on potential gains while also buying protection against downturns. According to QCP Capital, there is demand for $45 calls expiring in May, indicating expectations of a price increase. Similarly, options on Deribit show a strong interest in the $80,000 call. However, the persistent demand for puts, which provide protection against losses, suggests a lingering caution. The US consumer price index for March is expected to show a significant increase in annualized inflation, driven primarily by rising energy costs. This could lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate, potentially supporting the case for further Fed rate increases and negatively impacting risk assets like bitcoin. The outcome of the US-Iran talks in Pakistan will also be crucial for financial market stability, with a positive resolution potentially accelerating bitcoin's rally. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a recent spike, indicating increased uncertainty around inflation and interest rates. However, the index has since dropped back, suggesting a return to calm in the bond market, which could be a positive signal for crypto investors.