Lack of Conviction in Institutions' Bitcoin Positions

The recent 7% rally in bitcoin's price to $75,224.80 has not been enough to establish strong conviction, as the recovery has stalled near $72,000 ahead of key events such as the US inflation report and US-Iran talks. Institutions are adopting a cautious approach, reflected in the options market where they are buying calls to bet on potential gains while also purchasing puts for downside protection. The demand for $80,000 calls has been notable, but the persistence of put buying and a negative options skew indicate a lingering bias towards protection against declines. The upcoming US consumer price index is expected to show a significant increase in annualized inflation, primarily driven by rising energy prices, which could lead to market volatility if the core figure exceeds estimates. The meeting between Iranian and US delegates may also impact financial market stability, with a potential resolution to the conflict likely to accelerate bitcoin's rally. The recent calm in the US bond market, as reflected in the ICE BofA US Bond Market Option Volatility Estimate Index, may also be a positive signal for crypto bulls.