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

Despite bitcoin's recent 7% price surge, conviction remains weak due to impending binary risks, including the US inflation report and US-Iran truce talks. Institutions are adopting a cautious strategy, purchasing call options while also buying put options for downside protection. According to QCP Capital, there is demand for the $45 call expiring in May, indicating expectations of a price increase. However, the persistent demand for puts and negative options skew across all time frames suggest 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, primarily driven by rising energy prices. This could lead to market volatility, particularly if the core figure exceeds the estimated 2.7% annualized increase. 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) has shown a decrease in volatility, indicating a calm bond market and a green signal for crypto bulls.