Lack of Conviction in Institutional Bitcoin Positions

The recent 7% surge in bitcoin's price to $77,170.21 has not been enough to instill conviction, as the recovery has stalled near $72,000 ahead of key events such as the US inflation report and US-Iran truce talks. Institutions are adopting a cautious approach, purchasing call options to bet on potential gains while also buying downside protection. According to QCP Capital, there is demand for the $45 call expiring in May, indicating expectations of a price rise above the current $40. Similar flows have been seen on Deribit, with the $80,000 call being the most popular bet. However, the demand for puts, which offer protection against declines, persists. 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 volatility if the core figure exceeds the estimated 2.7%. 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.