Institutional Bitcoin Positions Lack Conviction Amidst Upcoming Economic Events

The recent 7% surge in bitcoin's price to $74,891.57 has not been accompanied by strong conviction, as the recovery has stalled near $72,000 ahead of key events such as the US inflation report and US-Iran talks. Institutions are adopting a cautious approach, buying call options to bet on price gains while also purchasing downside protection. According to QCP Capital, there is demand for the $45 call expiring in May on BlackRock's spot bitcoin ETF, indicating expectations of a price rise above the current $40 level. Similarly, bitcoin options on Deribit have seen significant interest in the $80,000 call. However, the persistent demand for puts, which offer protection against declines, suggests a lingering bias towards 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 could lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate, potentially weighing on risk assets like bitcoin. The upcoming meeting between Iranian and US delegates in Pakistan may also impact financial market stability, with a positive outcome 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 decrease in turbulence, indicating calmer conditions in the global finance and collateral and credit creation.