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

The price of bitcoin has surged by almost 7% since Sunday to $75,609.10, but the recovery has stalled near $72,000 due to key binary risks, including the upcoming US inflation report and US-Iran truce talks. Institutions are adopting a cautious approach, buying calls to speculate on potential gains while also purchasing puts to protect against losses. According to QCP Capital, there is a demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating an expected price increase. Similarly, the $80,000 call has emerged as a popular bet on Deribit. However, the demand for puts persists, as seen in the options skew, which remains negative across all time frames, indicating 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. This could lead to market volatility, especially if the core figure exceeds the estimated 2.7% annualized rate, potentially cementing the case for Fed rate increases and weighing on risk assets like bitcoin. 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 has shown a decrease in volatility in US Treasury futures, indicating a calm bond market and a positive signal for crypto bulls.