Lack of Conviction in Institutional Bitcoin Positions; CPI and Iran Talks May Provide Clarity

The price of bitcoin, currently at $75,886.45, has seen a 7% increase since Sunday but still lacks conviction, with its recovery stalling near $72,000 due to upcoming key events such as the US inflation report and US-Iran talks. Institutions are taking a cautious stance, as seen in the options market where they are buying calls to bet on gains while also purchasing puts for downside protection. According to QCP Capital, there is demand for the $45 call expiring in May for BlackRock's spot bitcoin ETF, indicating an expected price rise. However, the demand for puts persists, revealing a lingering bias for protection against declines. The US consumer price index for March is expected to show a significant increase in annualized inflation, primarily due to rising energy prices. This could lead to market volatility, especially if the core figure exceeds the estimated 2.7% annualized rate, potentially weighing on risk assets like bitcoin. The meeting between Iranian and US delegates may also impact financial market stability, with a positive outcome potentially accelerating bitcoin's rally. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown a recent spike, indicating rising uncertainty around inflation and interest rates. However, the index has since dropped, signaling calmer bond markets, which could be a positive sign for crypto bulls.