QCP: Market Expecting Ethereum and Bitcoin to Face Pullback Pressure Around $4,000 and $120,000

BlockBeats News, July 28th, QCP released its daily market analysis report stating that Ethereum is gradually approaching the $4000 price level, last seen in December of last year. With the continuous inflow of funds into the Ethereum spot ETF surpassing that of the Bitcoin ETF for seven consecutive days, market attention and speculation on ETH are heating up. Considering that ETH's market value is currently only one-fifth of BTC's, the threshold to attract institutional and corporate funds is relatively lower, making price action more sensitive.

Despite Ethereum dominating most of the headlines in recent weeks, Bitcoin has demonstrated quiet resilience. Although the inflow of funds into the Bitcoin spot ETF has slowed down, the price trend remains steady.

Bitcoin's dominance rate still remains at around 60%, with almost no fluctuation in the past week, reflecting the market's long-term confidence in Bitcoin as a store of value asset rather than a broad rotation into the altcoin market. This also indicates that there is still room for ETH and other mainstream coins to further compete for market share. For comparison, in November 2021 when ETH hit its all-time high, Bitcoin's dominance rate dropped to below 45%, while ETH approached 20%.

However, in the short term, the market's long positions are relatively crowded. The open interest of BTC and ETH perpetual contracts has reached nearly a one-year high, at $45 billion and $28 billion, respectively; the funding rates of major exchanges are also generally above 15%. Although it has not reached the level of "irrational exuberance" or extreme liquidation risk, a slight negative impact could trigger a chain reaction similar to what was seen last Friday.

It is worth noting that some whales have started to take profits on their long positions. For example, a larger ETH 26SEP25 3.6k/4k/4.2k bullish call spread combination has been closed out; at the same time, a large number of BTC 8AUG25 $110,000 bearish put options have been bought as a hedge against short-term downward risk.

Based on the options flow and the risk reversal flattening in the front-end tenor, the market expects ETH and BTC to face some profit-taking pressure around $4000 and $120,000, respectively. However, in the current environment of strong momentum, compelling narratives, and macro tailwinds, QCP believes that long-term holders and institutional investors will continue to "buy the dip," as seen last Friday.