Lack of Conviction in Institutions' Bitcoin Positioning May Be Influenced by CPI and Iran Talks

The bitcoin price, currently at $76,239.03, has seen a 7% increase since Sunday but still lacks conviction due to its struggle to surpass $72,000, largely because of impending risks such as the US inflation report on Friday and US-Iran peace talks over the weekend. Institutions are taking a cautious approach in the options market, where they are buying call options to speculate on potential gains while also purchasing 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 increase. Similarly, the $80,000 call is the most popular bet on Deribit. However, the demand for puts persists, revealing a lingering bias towards 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 further support the case for Fed rate increases, potentially impacting risk assets like BTC. The meeting between Iranian and US delegates in Pakistan may also influence 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 turbulence, indicating a positive signal for crypto bulls.