The price of bitcoin, currently at $75,917.67, has seen a nearly 7% increase since Sunday but still lacks conviction, stalling near $72,000 ahead of significant binary risks, including the release of the US inflation report on Friday and US-Iran truce talks over the weekend. This cautious approach is reflected in the options market, where institutions are using call options to speculate on potential gains while also buying puts to mitigate potential losses.
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. However, the demand for puts persists, and options skew remains negative, indicating a lingering bias towards put options.
The upcoming US consumer price index report is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices. The core figure, excluding food and energy, is expected to be around 2.7%, but if it exceeds this estimate, it could lead to further interest rate increases, potentially negatively impacting risk assets like bitcoin. The meeting between Iranian and US delegates in Pakistan over the weekend will also be crucial in determining financial market stability, and a positive outcome could 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 calmer conditions in the bond market, which could be beneficial for crypto bulls.