Crypto sentiment 'very excessive', getting near 'excessive euphoria': Needham

starcrypto — Needham & Co. mentioned its proprietary ‘Crypto Euphoria Needham Diagram’ (CEND) reached its highest ranges since its inception, indicating that market sentiment for cryptocurrencies is “very excessive proper now” and approaching “excessive euphoria.”

The CEND index, which tracks numerous metrics associated to the crypto market cycle, recorded a price of 64 this week, a big rise from 55 in December 2024, but nonetheless beneath the height of 82 seen in October 2021.

The evaluation by Needham consists of six underlying metrics that measure investor sentiment throughout retail, crypto-native, and institutional domains, in addition to “danger on” indicators such because the market worth to realized worth (MVRV) Z rating and dominance.

These metrics intention to seize the extent of concern of lacking out (FOMO) and capital allocation to riskier segments of the crypto universe. In line with Needham, the present CEND studying is an indication of accelerating euphoria, which traditionally aligns with market tops.

“This week CEND reached its highest ranges since we started publishing the index,” the agency mentioned. “Practically each underlying metric we analyze to trace the crypto cycle has gone greater following the Trump inauguration.”

The report notes that eight out of the ten most downloaded finance apps had been crypto-related, indicating heightened retail curiosity. Nevertheless, the rankings for Coinbase (NASDAQ:) and Robinhood (NASDAQ:) apps have dropped since December 2024, whereas new competitor apps are gaining traction.

The Bitcoin MVRV Z-score, a metric used to evaluate whether or not Bitcoin is overvalued or undervalued, stays elevated, suggesting that a lot of market contributors are in revenue.

Bitcoin dominance can be excessive, which Needham interprets as a sign of the early phases of a bull market, with traders not but closely allotted to riskier altcoins. On-chain leverage has elevated since December, pointing to larger risk-taking and euphoria amongst crypto natives.

Moreover, Google (NASDAQ:) search curiosity for ‘crypto’ has surged to its highest ranges since 2021, with a notable enhance following the launch of a meme coin by former President Trump.

Lastly, the Road consensus on crypto-linked shares has proven a big uptick, with an total enhance within the “Road Purchase Consensus,” regardless of a extra bearish outlook on Coinbase and a noticeable bullish sentiment in direction of Bitcoin miners.

This pattern “alerts to us growing institutional/sell-side euphoria in crypto,” Needham analysts mentioned.