Lack of Conviction in Institutions' Bitcoin Positioning, CPI and US-Iran Talks May Be Key

Despite bitcoin's recent 7% price surge to $76,152.44, conviction remains weak due to the recovery stalling near $72,000 ahead of key binary risks. Institutions are adopting a cautious approach, evident in the options market where they are buying calls while also seeking downside protection through puts. The demand for $80,000 calls and $45 calls expiring in May indicates a bullish outlook, but the persistent demand for puts reveals a lingering bias for downside protection. The upcoming US consumer price index (CPI) for March, expected to show an increase in annualized inflation, and the US-Iran truce talks may impact the markets. The CPI is expected to rise above 3%, led by energy prices, which could lead to volatility if the core figure exceeds the estimated 2.7%. The outcome of the US-Iran talks may also impact the financial markets, 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 (MOVE) has shown a decrease in volatility, indicating a calm bond market, which could be a positive signal for crypto bulls.