Analysis: The options market reflects that ETH may face a pullback around $4000 and BTC around $120,000.

On July 28, news came that QCP Capital, a crypto investment firm based in Singapore, stated that Ethereum has been surging rapidly, approaching the $4000 mark for the first time since last December. With the inflow of spot ETH ETF funds exceeding Bitcoin for the seventh consecutive day, market attention towards Ethereum continues to rise. Given that Ethereum's market capitalization is still only one-fifth of Bitcoin's, the scale of institutional and corporate treasury funds needed to drive its price up is much smaller. Despite Ethereum recently becoming the focus of media attention, Bitcoin still demonstrates strong resilience. Although the inflow of spot Bitcoin ETF funds has slowed down, its price movement remains robust. Even last Friday, when a long-term holder sold 80,000 Bitcoins, the market quickly absorbed this impact, with traders taking advantage of the dip to buy, which stabilized the brief spike in volatility.
The market cap of BTC remains stable at around 60%, indicating that the market still views it as the preferred store of value rather than fully turning to altcoins. In November 2021, when ETH reached an all-time high, BTC's share was below 45%, while ETH was close to 20%. The current landscape shows that mainstream altcoins still have room for growth. Short-term risk indicators suggest the market is overheated: the open interest in BTC and ETH perpetual contracts reached $45 billion and $28 billion, respectively, marking a one-year high; the funding rates on major exchanges exceed 15%. Some large investors have taken profits, including closing out ETH September expiry call option butterfly spreads and buying large put options for BTC expiring in August to hedge against downside risk. The options market indicates that ETH may face profit-taking around $4000 and BTC around $120,000. However, considering market momentum, narrative heat, and macroeconomic support, if a pullback occurs, institutions and long-term holders may continue to adopt a buy-the-dip strategy. $BNB
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