Bitcoin The price may have risen almost 7% since Sunday, but conviction remains low with the rally stalling near $72,000 ahead of major binary risks including Friday’s US inflation report and this weekend’s US-Iran truce negotiations.
The cautious approach is evident in the options market, where institutions continue to chase upside via calls, derivative contracts that allow traders to bet on gains in the underlying asset.
According to QCP Capital, options linked to BlackRock’s spot bitcoin ETF (IBIT) show demand for the $45 call expiring in May. This means that traders expect the IBIT price to rise above this level from the current $40. Bitcoin options on Deribit saw similar flows, with the $80,000 call becoming the most popular bet. Yet demand for puts, which offer downside protection, persists.
“IBIT options showed sustained open interest for the May 45 call, holding over 80,000 contracts throughout the week, while downside covering remained in place via sales and long-term protection. The combination reflects a market participating on the 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 strong demand for downside protection is also revealed in options bias, which measures the price difference between calls and puts, and remains negative across all time frames. This indicates a persistent bias towards puts.
“The asymmetric picture is clear: Institutions are buying protection on the downside and selling calls on the upside. After the war with Iran, some of the tail risk was factored in, so the asymmetry has eased, but the underlying flow remains firmly unidirectional. Put demand, call supply,” Maxime Seiler, CEO of STS Digital, a leading trading firm specializing in digital asset derivatives, told CoinDesk.
The US Consumer Price Index (CPI) for March is expected to show a marked increase in annualized inflation, well above 3%, mainly driven by rising energy prices.
This should come as no surprise, given that the war in Iran has led to a sharp rise in oil and gasoline prices around the world. Still, markets could experience volatility if the base figure, which excludes food and energy, exceeds the annualized estimate of 2.7%. This would further strengthen the case for a Fed rate hike, which could weigh on risk assets such as BTC.
Beyond the CPI, the weekend meeting between Iranian and US delegates in Pakistan is key to financial market stability. BTC’s rally will likely accelerate if they find a way to end the war and normalize tanker traffic through the Strait of Hormuz. The first clues could come from hyperliquid-quoted perpetual oil futures contracts. Stay vigilant!
What is the trend
Signal of the day
The chart shows movements in the ICE BofA US Bond Market Option Volatility Estimate Index (MOVE), which reflects the volatility of US Treasury futures.
Large increases in the index indicate increasing uncertainty about inflation, interest rates or macroeconomic shocks. Treasuries anchor global finance, collateral and credit creation. As a result, increased turmoil in U.S. bonds often coincides with tightening financial conditions and greater risk aversion spilling over into equity, credit and cryptocurrency markets.
The index jumped in March, from 73% to 115%, only to fall to 74% this month. This showed that the world’s most important bond market is calm again, a green signal for crypto bulls.
Read more: For analysis of current altcoin and derivatives activity, see Cryptocurrency markets today .
For a more comprehensive list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
