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

Although bitcoin's price has seen a 7% increase since Sunday, the recovery has stalled near $72,000 due to key risks, including the upcoming US inflation report and US-Iran talks. Institutions are adopting a cautious stance, as seen in the options market where they are purchasing call options to speculate on potential gains while also buying put options 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 reveals a lingering bias for protection against declines. 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, especially if the core figure exceeds the estimated 2.7% annualized increase. The meeting between Iranian and US delegates in Pakistan may also impact 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. The ICE BofA US Bond Market Option Volatility Estimate Index has shown a decrease in turbulence in US bonds, which could be a positive signal for crypto bulls.