Institutions' bitcoin positioning lacks conviction; CPI, Iran talks might help

Bitcoin's BTC$72,179.45 price may have rallied almost 7% since Sunday, but conviction remains weak, with the recovery stalling near $72,000 ahead of key binary risks, including Friday’s U.S. inflation report and U.S.-Iran truce talks this weekend.

The cautious approach is evident in the options market, where institutions continue to chase upside via calls, the derivative contracts that allow traders to bet on gains of the underlying asset.

According to QCP Capital, options tied to BlackRock’s spot bitcoin ETF (IBIT) show demand for the $45 call expiring in May. That means traders expect IBIT’s price to rise above that level from the present $40. Bitcoin options on Deribit have seen similar flows, with the $80,000 call emerging as the most popular bet. Still, demand for puts, which offer downside protection, persists.

“IBIT options showed sustained open interest in the May 45 call, holding above 80k+ contracts through the week, while downside hedging remained in place via puts and long-dated protection. The combination reflects a market participating in upside, but not abandoning hedges,” the Singapore-based trading firm, which is one of the world’s largest crypto market makers, said in an email.

The sticky demand for protection against declines is also revealed in options skew, which measures the price differential between calls and puts, and remains negative across all time frames. That indicates a lingering bias for put options.

“The skew picture is clear: institutions are buying downside protection and selling upside calls. After the Iran war headlines, some of the tail risk has been priced out, so skew has eased, but the underlying flow remains firmly one-directional. Demand for puts, supply of calls,” Maxime Seiler, CEO of STS Digital, a principal trading firm specializing in digital asset derivatives, told CoinDesk.

The U.S. consumer price index (CPI) for March is expected to show a marked increase in annualized inflation to well over 3%, led primarily by rising energy prices.

That shouldn’t come as a surprise, given that the Iran war led to a sharp surge in oil and gasoline prices worldwide. Still, markets may see volatility if the core figure, which excludes food and energy, blows past the annualized 2.7% estimate. That would further cement the case for Fed rate increases, potentially weighing on risk assets such as BTC.

Beyond CPI, the weekend meeting between Iranian and U.S. delegates in Pakistan holds the key to financial market stability. BTC’s rally will likely accelerate if they find a way to end the war and normalize oil tanker traffic through the Strait of Hormuz. The first cues could come through Hyperliquid-listed oil perpetual futures. Stay alert!

What's trending

• U.S. oil climbs above $100 as U.S.-Iran ceasefire fails to boost tanker traffic via Strait of Hormuz (CNBC): U.S. West Texas Intermediate crude futures for May delivery rose 2.2% to $100.04 per barrel at around 5:25 a.m. ET, while international benchmark Brent crude futures for June delivery added 1.7% at $97.59 per barrel.
• Trump issues NATO ultimatum to reopen Strait of Hormuz 'within days' (euronews): Trump told NATO Secretary General Mark Rutte that NATO countries must work on a solution to resolve the crisis in the Strait of Hormuz immediately.
• No longer off limits, the Strait of Hormuz remains thorny politically (The New York Times): Even after a ceasefire, Iran is keeping a chokehold on traffic, forcing countries to cut deals that could put them at odds with the U.S.
• Zelenskiy’s top aide sees Ukraine nearing a deal with Putin (Bloomberg): Ukraine’s top negotiator with Russia said he sees progress toward a potential peace deal with the Kremlin, adding that a resolution to the war may not take long to achieve.
• HSBC and Standard Chartered-led group land Hong Kong’s first stablecoin licenses (CoinDesk): The decision to license the city's note-issuing banks first appears to be deliberate. HSBC and Standard Chartered are two of only three commercial banks authorized to print Hong Kong dollar banknotes, a system that dates to 1846.

Today's signal

The MOVE index has reversed the early March pop. (TradingView)

The chart shows swings in the ICE BofA US Bond Market Option Volatility Estimate Index (MOVE), which reflects volatility in U.S. Treasury futures.

Sharp spikes in the index indicate rising uncertainty around inflation, interest rates or macro shocks. Treasury notes anchor the global finance and collateral and credit creation. Hence, increased turbulence in U.S. bonds often coincides with tighter financial conditions and broader risk-off sentiment spilling into equities, credit, and crypto markets.

The index popped in March, rising to 115% from 73% only to drop back to 74% this month. It showed that the world's most important bond market is calm again, a green signal for crypto bulls.

Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today .

For a more comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead".