Lack of Conviction in Institutional Bitcoin Positions; CPI and Iran Talks May Bring Clarity

Despite bitcoin's recent 7% price surge to $77,341.74, conviction remains limited, with the recovery faltering near $72,000 ahead of key events such as Friday's US inflation report and US-Iran truce talks. Institutions are adopting a cautious strategy, chasing potential gains through call options while also buying protection against price declines. Demand for calls, which allow traders to bet on price increases, persists, with the $80,000 call being a popular bet. However, the demand for puts, which offer protection against declines, also remains steady, indicating a lingering bias towards downside protection. The upcoming US consumer price index (CPI) 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 increase. The weekend 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 (MOVE) has shown a decrease in volatility in US Treasury futures, indicating calmer conditions in the global finance and collateral and credit creation, which could be a positive signal for crypto bulls.