Analysis: The options market reflects that ETH may face profit-taking around $4000 and BTC around $120,000

On July 28, news emerged that Singapore-based crypto investment firm QCP Capital stated that Ethereum has surged rapidly, nearing 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 on Ethereum continues to rise. Given that Ethereum's market cap is still only one-fifth that of Bitcoin, the scale of institutional and corporate treasury funds needed to drive its price increase is much smaller. Despite Ethereum becoming the media focus recently, Bitcoin still demonstrates strong resilience. Although the inflow of spot Bitcoin ETF funds has slowed, its price trend remains firm. Even last Friday, when a long-term holder sold 80,000 Bitcoins, the market quickly absorbed the impact, with traders seizing the opportunity to buy on dips, stabilizing the short-term surge in volatility.

Bitcoin's market cap percentage remains stable around 60%, indicating that the market still views it as the preferred choice for value storage, rather than fully shifting to altcoins. In November 2021, when ETH reached an all-time high, BTC's percentage was below 45%, with ETH close to 20%. The current pattern shows that mainstream altcoins still have room for growth. Short-term risk indicators suggest the market is overheated: the open interest for BTC and ETH perpetual contracts reached $45 billion and $28 billion, respectively, at a one-year high; the funding rates on major exchanges exceed 15%. Some large investors have taken profits, including closing ETH September expiration call option butterfly spreads and buying large put options for BTC expiring in August to hedge against downside risk. The options market reflects that ETH may face profit-taking around $4000 and BTC around $120,000. However, considering market momentum, narrative heat, and macroeconomic support, if a correction occurs, institutions and long-term holders may continue to adopt a buy-the-dip strategy.