Bitcoin is holding near the $110,000–112,000 band, but market participants are increasingly positioning Ethereum as the asset most likely to deliver September upside. Traders and desk flows show a split: BTC acting as a macro hedge, ETH capturing conviction for performance.
Macro uncertainty—highlighted by questions over central bank policy independence and a softer dollar—has supported traditional hedges such as BTC and gold. Yet options activity and prediction-market bets point to ETH for potential breakout gains. Institutional flows into ETH via ETFs, plus expectations around protocol upgrades, are reinforcing demand.
Market makers report muted implied volatility in BTC and a negative skew that keeps puts costly, which in turn makes certain call structures more attractive for relative-value traders. By contrast, ETH risk reversals have rebounded from earlier weakness, signaling renewed willingness to pay for upside exposure. SOL and other layer‑1 tokens also show rising upside interest, broadening the rally beyond the two majors.
Prediction markets add a real‑money barometer: participants largely expect BTC to remain capped near $120,000 through September, while ETH has a notable chance of testing and breaching the $5,000 level — a move consistent with recent monthly gains.
Why this matters: the split in positioning changes how risk is managed across desks and treasuries. Organizations treating BTC as a governance or inflation hedge may prioritize capital preservation, while growth‑oriented funds chase ETH’s asymmetric upside. That rotation can increase liquidity and volatility in mid‑cap tokens linked to Ethereum’s ecosystem.
Risk considerations: market positioning and prediction markets reflect sentiment, not guarantees. Options structures and ETF flows can reverse quickly if macro data or Fed guidance shifts. Investors should weigh liquidity, execution risk and their own time horizons before following directional bets.
Source: CoinDesk. Read the original coverage for full details.