Lack of Conviction in Institutions' Bitcoin Positioning Amid Upcoming CPI and Iran Talks

Despite bitcoin's recent 7% price surge to $75,864.80, conviction in the market remains weak, with the recovery faltering near $72,000 ahead of key risk events, including the US inflation report and US-Iran truce talks. Institutions are buying call options to bet on potential gains, but they are also purchasing put options for protection against declines. The demand for puts is evident in the options skew, which remains negative across all time frames, indicating a lingering bias for put options. 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. The core figure, which excludes food and energy, is estimated to be around 2.7%, but a higher-than-expected reading could lead to increased volatility and potentially weigh on risk assets like bitcoin. The meeting between Iranian and US delegates in Pakistan may also impact financial market stability, and a positive outcome could accelerate bitcoin's rally. The ICE BofA US Bond Market Option Volatility Estimate Index (MOVE) has shown a decrease in volatility, indicating calmer conditions in the US bond market, which could be a positive signal for crypto bulls.