The bitcoin price, currently at $74,639.63, has seen a 7% increase since Sunday, but its recovery has stalled near $72,000 due to impending binary risks, including the US inflation report on Friday and the US-Iran truce talks over the weekend. Institutions are taking a cautious approach, evident in the options market where they are purchasing call options to speculate on potential gains, while also buying put options 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 above the current $40 level.
Similarly, bitcoin options on Deribit have seen a surge in demand for the $80,000 call. However, the persistent demand for puts, which offer protection against declines, is also notable.
The options skew, which measures the price differential between calls and puts, remains negative across all time frames, indicating a lingering bias towards put options. The upcoming US consumer price index for March is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices. This may lead to market volatility, especially if the core figure exceeds the estimated 2.7% annualized growth, potentially leading to further Federal Reserve rate increases and negatively impacting risk assets like bitcoin. The meeting between Iranian and US delegates in Pakistan over the weekend will also be crucial in determining 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 first indications of this may be seen in Hyperliquid-listed oil perpetual futures. The ICE BofA US Bond Market Option Volatility Estimate Index, which reflects volatility in US Treasury futures, has shown sharp spikes in the past, indicating rising uncertainty around inflation, interest rates, or macro shocks. A recent spike in the index was followed by a drop, signaling a return to calm in the bond market, which could be a positive sign for crypto bulls.