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

The bitcoin price, currently at $77,124.23, has seen a 7% increase since Sunday, but its recovery has stalled near $72,000 due to key binary risks, including the upcoming US inflation report and US-Iran truce talks. Institutions are adopting a cautious stance, evident 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 rise above $40. Similarly, bitcoin options on Deribit have seen interest in the $80,000 call. However, the demand for puts, which offer protection against declines, persists, as shown by the negative options skew across all time frames, indicating a lingering bias for put options. The US consumer price index for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices due to the Iran war. If the core figure exceeds the estimated 2.7%, it may lead to increased volatility and potentially weigh on risk assets like BTC. 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 BTC's rally. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a decrease in uncertainty around inflation and interest rates, indicating a positive signal for crypto bulls.