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

The price of bitcoin has seen a 7% increase since Sunday, but its recovery has stalled near $72,000 due to upcoming risk events, including the US inflation report and US-Iran talks. Institutions are adopting a cautious strategy, purchasing call options to bet on price gains while also buying downside protection. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, and the $80,000 call is the most popular bet on Deribit. However, the demand for puts, which offer protection against declines, persists, as indicated by the negative options skew across all time frames. The US consumer price index for March 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%, and if it exceeds this estimate, it could lead to further Federal Reserve rate increases, potentially impacting 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, which reflects volatility in US Treasury futures, has shown a decrease in turbulence, indicating a calm bond market and a positive signal for crypto bulls.