PakGazette — Needham & Co. said its own ‘Crypto Euphoria Needham Diagram’ (CEND) hit its highest levels since its inception, indicating that market sentiment towards cryptocurrencies is “very high right now.” and approaches “extreme euphoria.”
The CEND index, which tracks various metrics related to the cryptocurrency market cycle, recorded a value of 64 this week, a significant increase from 55 in December 2024, but still below the peak of 82 seen in October 2021.
Needham’s analysis includes six underlying metrics that measure investor sentiment across the retail, crypto-native, and institutional domains, as well as “risk” indicators such as the market-to-realized value (MVRV) Z-score and domain .
These metrics aim to capture the level of fear of missing out (FOMO) and the allocation of capital to riskier segments of the crypto universe. According to Needham, the current CEND reading is a sign of growing euphoria, which historically aligns with market highs.
“This week the CEND reached its highest levels since we began publishing the index,” the firm said. “Almost all of the underlying metrics we analyze to track the cryptocurrency cycle have increased after Trump’s inauguration.”
The report notes that eight of the ten most downloaded financial apps were related to cryptocurrencies, indicating increased retail interest. However, the rankings for apps Coinbase (NASDAQ 🙂 and Robinhood (NASDAQ 🙂) have fallen since December 2024, while new competing apps are gaining ground.
Bitcoin’s MVRV Z-score, a metric used to assess whether Bitcoin is overvalued or undervalued, remains elevated, suggesting that a large number of market participants are making profits.
Bitcoin dominance is also high, which Needham interprets as an indication of the early stages of a bull market, with investors not yet heavily allocated to riskier altcoins. On-chain leverage has increased since December, pointing to increased risk-taking and euphoria among crypto natives.
Additionally, search interest for “crypto” on Google (NASDAQ 🙂 has risen to its highest levels since 2021, with a notable spike following the launch of a meme coin by former President Trump.
Lastly, the Street consensus on cryptocurrency-linked stocks has shown a significant rebound, with an overall increase in the “Street Buy Consensus,” despite a more bearish outlook on Coinbase and notable bullish sentiment toward miners. of Bitcoin.
This trend “indicates growing institutional/sell-side euphoria for cryptocurrencies,” the Needham analysts said.
