Institutional Bitcoin Positions Lack Conviction Amid Upcoming Economic Events

The bitcoin price, currently at $75,295.41, has seen a nearly 7% increase since Sunday but lacks strong conviction, stalling near $72,000 ahead of key events such as Friday's US inflation report and US-Iran truce talks. Institutions are adopting a cautious approach, evident in the options market where they are buying calls to bet on price 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 above $40. Similarly, bitcoin options on Deribit show a popular bet on the $80,000 call, yet demand for puts persists. The options skew, measuring the price differential between calls and puts, remains negative, indicating a bias towards put options. The upcoming 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 increase, potentially supporting the case for Fed 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 for 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, which reflects volatility in US Treasury futures, has shown sharp spikes indicating rising uncertainty around inflation, interest rates, or macro shocks. After rising to 115% in March, the index dropped back to 74% this month, signaling calm in the world's most important bond market, which could be a positive sign for crypto bulls.