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

Although bitcoin's price has surged nearly 7% since Sunday to $74,646.94, 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 approach in the options market, where they are purchasing calls to speculate on potential gains while also buying puts to hedge against losses. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating expectations of a price increase above the current $40. A similar trend is observed in bitcoin options on Deribit, with the $80,000 call being the most popular bet. However, the demand for puts persists, revealing a lingering bias for downside protection. 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, 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 weekend meeting between Iranian and US delegates in Pakistan may also influence 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.