According to BlockBeats, on July 28, QCP released a daily market analysis report stating that Ethereum is gradually approaching the $4,000 mark, which it has not touched since last December. With the inflow of funds into spot Ethereum ETFs exceeding that of Bitcoin ETFs for seven consecutive days, the market's attention and speculation on ETH are heating up. Considering that ETH's market capitalization is currently only one-fifth of BTC's, the threshold for attracting institutional and corporate funds is relatively lower, making it more sensitive to price movements.
Despite ETH dominating most of the market headlines in recent weeks, Bitcoin has shown a quietly resilient strength. Although the inflow of funds into spot BTC ETFs has slowed, the price trend remains solid.
The dominance of BTC remains around 60%, with almost no fluctuation over the past week, reflecting the market's long-term confidence in BTC as a store of value asset, rather than a complete rotation into the altcoin market. This also means that ETH and other major cryptocurrencies still have room to further compete for market share. In comparison, in November 2021, when ETH reached its all-time high, BTC dominance fell below 45%, while ETH was close to 20%.
However, in the short term, the market's long positions have become relatively crowded. The open interest of perpetual contracts for BTC and ETH is close to a one-year high, reaching $45 billion and $28 billion, respectively; the funding rates of perpetual contracts on major exchanges also generally exceed 15%. Although it has not yet reached the level of 'irrational exuberance' or extremely high liquidation risk, even a slight negative shock could trigger a chain reaction similar to last Friday's.
It is worth noting that some large holders have begun to take profits on their long positions. For example, a larger ETH 26SEP25 3.6k/4k/4.2k eagle call spread has been closed; meanwhile, a significant number of BTC 8AUG25 put options with a strike price of $110,000 have been purchased as a hedge against short-term downside risk.
From the perspective of options flow and the flattening of front-end Risk Reversal, the market expects ETH and BTC to face some profit-taking pressure around $4,000 and $120,000, respectively. However, against the backdrop of strong current momentum, a compelling narrative, and a favorable macro environment, QCP believes that long-term holders and institutional investors will continue to 'buy the dip,' as seen last Friday.
