Pakinomist — Needham & Co. said its proprietary ‘Crypto Euphoria Needham Diagram’ (CEND) reached its highest levels since inception, indicating that market sentiment for cryptocurrencies is “very high right now” and approaching “extreme euphoria.”
The CEND index, which tracks various metrics related to the crypto market cycle, registered 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.
The analysis by Needham includes six underlying metrics that measure investor sentiment across the retail, crypto-native and institutional domains, as well as “risk on” indicators such as market capitalization to realized value (MVRV) Z-score and dominance.
These metrics aim to capture the level of fear of missing out (FOMO) and capital allocation to riskier segments of the crypto universe. According to Needham, the current CEND reading is a sign of rising euphoria, which historically aligns with the market’s top.
“CEND this week reached its highest levels since we started publishing the index,” the firm said. “Nearly every underlying metric we analyze to track the crypto cycle has gone higher since the Trump inauguration.”
The report notes that eight out of the ten most downloaded finance apps were crypto-related, indicating increased retail interest. However, the rankings of Coinbase (NASDAQ: ) and Robinhood (NASDAQ: ) apps have declined since December 2024 as new competing apps gain traction.
The Bitcoin MVRV Z-score, a measure used to assess whether Bitcoin is overvalued or undervalued, remains elevated, suggesting that a large number of market participants are in profit.
Bitcoin dominance is also high, which Needham interprets as an indication of the early stages of a bull market where investors are not yet heavily allocated to riskier altcoins. On-chain leverage has increased since December, pointing to greater risk-taking and euphoria among crypto-natives.
Also, Google’s (NASDAQ:) search interest in ‘crypto’ has risen to its highest levels since 2021, with a significant increase following the launch of a meme coin by former President Trump.
Finally, the Street consensus on crypto-linked stocks has shown a significant increase with an overall increase in the “Street Buy Consensus” despite a more bearish view on Coinbase and a noticeable bullish sentiment towards Bitcoin miners.
This trend “signals to us increasing institutional/sell-side euphoria in crypto,” Needham analysts said.
