Bitcoins The price may have rallied nearly 7% since Sunday, but conviction remains weak, with the rally stalling near $72,000 ahead of key binary risks, including Friday’s US inflation report and US-Iran ceasefire 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 in the underlying asset.
According to QCP Capital, options tied to BlackRock’s spot bitcoin ETF (IBIT) are showing demand for the $45 call that expires in May. This means traders expect IBITS price to rise above this level from the current $40. Bitcoin options on Deribit have seen similar flows, with the $80,000 call emerging as the most popular bet. Still, demand continues for putties that offer downside protection.
“IBIT options showed sustained open interest in the May 45 call, holding over 80,000+ contracts through the week, while downside protection remained in place via puts and long-dated protection. The combination reflects a market that participates in the upside but does not abandon hedges,” said the Singapore-based trading firm, which is one of the world’s largest crypto market email producers.
The sticky demand for downside protection is also revealed in options skewness, which measures the price difference between calls and puts, and remains negative across all timeframes. It indicates a persistent bias for put options.
“The bias 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 in, so the bias has eased, but the underlying flow remains firmly unidirectional. Demand for puts, supply of calls,” said Maxime Seiler, CEO of STS Digital, which specializes in digital asset firm Coin.
The US consumer price index (CPI) for March is expected to show a marked increase in annual inflation to just over 3%, primarily led by rising energy prices.
This should not come as a surprise since the Iran war led to a sharp rise in oil and gasoline prices worldwide. Still, markets could experience volatility if the core figure, which excludes food and energy, blows past the annual estimate of 2.7%. That would further cement the case for Fed rate hikes, potentially weighing on risk assets like BTC.
In addition to the CPI, the weekend meeting between Iranian and American delegates in Pakistan is key to financial market stability. BTC’s rally is likely to accelerate if they find a way to end the war and normalize oil tanker traffic through the Strait of Hormuz. The first signals could come through Hyperliquid-listed oil perpetual futures. Pay attention!
What is trending
Today’s signal
The chart shows fluctuations in the ICE BofA US Bond Market Option Volatility Estimate Index (MOVE), which reflects the volatility of US Treasury futures.
Strong increases in the index indicate increasing uncertainty about inflation, interest rates or macro shocks. Treasury bills anchor global finance and collateral and credit creation. Therefore, increased turbulence in US bonds often coincides with tighter financial conditions and broader risk-off sentiment spilling over into equity, credit and crypto markets.
The index emerged in March, rising to 115% from 73% only to fall back to 74% this month. It showed that the world’s main 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.”
