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

Despite a 7% surge in bitcoin's price since Sunday, conviction remains weak, with the recovery stalling near $72,000 ahead of key events such as Friday's US inflation report and US-Iran truce talks. Institutions are adopting a cautious approach, chasing upside via calls while also buying downside protection. According to QCP Capital, options tied to BlackRock's spot bitcoin ETF show demand for the $45 call expiring in May, indicating traders expect the price to rise above that level. However, demand for puts, which offer downside protection, persists. The US consumer price index for March is expected to show a marked increase in annualized inflation, led primarily by rising energy prices. The weekend meeting between Iranian and US delegates in Pakistan holds the key to 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, which reflects volatility in US Treasury futures, has shown a decrease in turbulence, indicating a green signal for crypto bulls.