Institutional Bitcoin Trading Lacks Confidence

The recent 7% rally in bitcoin's price to $74,931.54 has not been enough to instill confidence, as the recovery has stalled near $72,000 ahead of significant risk events, including the upcoming US inflation report and US-Iran negotiations. Institutions are adopting a cautious approach, purchasing call options to speculate on potential gains while also buying put options for protection against declines. Options data reveals a demand for $45 and $80,000 calls, but the persistent demand for puts and a negative options skew across all time frames indicate a lingering bias towards downside protection. The US consumer price index is expected to show an increase in annualized inflation, led by rising energy prices, which could lead to market volatility. The outcome of the US-Iran meeting and its impact on oil prices will also be crucial for financial market stability and bitcoin's price. Additionally, the ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a decrease in uncertainty, providing a positive signal for crypto bulls.