Lack of Conviction in Institutions' Bitcoin Positions; CPI and Iran Talks May Bring Clarity

Despite a 7% price surge since Sunday, bitcoin's recovery has stalled near $72,000 due to key binary risks, including Friday's US inflation report and US-Iran truce talks. Institutions are adopting a cautious strategy, chasing upside via call options while demanding downside protection through puts. The demand for protection is reflected in options skew, which remains negative across all time frames, indicating a lingering bias for put options. The upcoming US consumer price index (CPI) for March is expected to show a significant increase in annualized inflation, which may lead to market volatility if the core figure exceeds estimates. The meeting between Iranian and US delegates in Pakistan may also impact financial market stability, potentially accelerating bitcoin's rally if a resolution is reached. The ICE BofA US Bond Market Option Volatility Estimate Index (MOVE) has shown reduced turbulence in US bonds, which could be a positive signal for crypto bulls.