Institutional Bitcoin Positions Lack Conviction Amidst Upcoming Economic Releases

The recent 7% surge in bitcoin's price to $74,798.73 has not been enough to instill conviction, as the recovery has stalled near $72,000 ahead of key events such as the U.S. inflation report and U.S.-Iran negotiations. Institutions are adopting a cautious approach, evident in the options market where they are purchasing calls to speculate on potential gains while also buying puts for downside protection. 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 a negative options skew across all time frames suggest a lingering bias towards downside protection. The upcoming U.S. consumer price index is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices, which could lead to market volatility if the core figure exceeds estimates. The meeting between Iranian and U.S. delegates in Pakistan is also crucial for financial market stability, and a positive outcome 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 a recent spike but has since dropped, indicating a calm bond market and a positive signal for crypto bulls.