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

Although bitcoin's price has surged nearly 7% since Sunday to $76,697.06, the 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 approach, evident in the options market where they are purchasing calls while also seeking downside protection. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating expectations of a price increase. Similarly, bitcoin options on Deribit have seen significant interest in the $80,000 call. However, the demand for puts, which provide protection against declines, persists. The US consumer price index for March is expected to show a marked increase in annualized inflation, primarily driven by rising energy prices. The core figure, excluding food and energy, is estimated to be around 2.7%, and any significant deviation from this could lead to market volatility. 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, which reflects volatility in US Treasury futures, has shown a decrease in turbulence, indicating a positive signal for crypto bulls.