Despite a 7% price surge since Sunday, bitcoin's recovery remains uncertain, stalling near $72,000 ahead of key events such as the US inflation report and US-Iran truce talks. Institutions are adopting a cautious strategy, using call options to bet on potential gains while also purchasing downside protection. According to QCP Capital, there is demand for the $45 call expiring in May, indicating expectations of a price rise above the current $40. Similarly, bitcoin options on Deribit show a popular bet on the $80,000 call.
However, the demand for puts, which offer protection against declines, persists. The US consumer price index (CPI) for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices. This could lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized rate. 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 (MOVE) reflects volatility in US Treasury futures, with sharp spikes indicating rising uncertainty around inflation, interest rates, or macro shocks. The index has dropped back to 74% after rising to 115% in March, indicating a calm bond market and a positive signal for crypto bulls.