After Donald Trump won the US presidential election on November 5, the price of Bitcoin (BTC) soared rapidly, breaking through the $93,000 mark last week, becoming the focus of the market. At the same time, the trading volume of ETFs and stocks related to cryptocurrencies has risen sharply, and the sentiment of retail investors has reached a new high. However, analysts warn that the frenetic market sentiment may bring potential risks.
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ToggleRetail sentiment index hits new high
Data tracked by JPMorgan shows that the Retail Sentiment Score for BTC has risen to a historical high of 4. The index measures the enthusiasm of investors based on trading activity in BTC-related products (including spot ETFs and other derivatives). JPMorgan's equity research team noted:
"In the ETF space, demand for BTC ETFs has been particularly strong since the election results were announced. For example, the z-score for IBIT reached 3.4, and the z-score for COIN even reached 6. This indicates that the demand for BTC-related products is exceptionally strong, far exceeding the historical average."
The z-score is a statistical indicator used to measure the degree of deviation of a data point from the average. A z-score of 3.4 or above indicates that the demand is significantly above average, reflecting the high level of interest in cryptocurrencies among retail markets. This may also lead to sudden changes in sentiment and bidirectional price volatility.
Options market sentiment shows extreme bullishness
The options market sentiment for MicroStrategy (MSTR), a stock linked to BTC, has also reached a new high. According to data from Market Chameleon, its one-year 25Delta put/call skew index fell to -26.7% last Wednesday, indicating that the market's demand for calls far exceeds that for puts. This means that investors are highly optimistic about further increases in the price of BTC.
Although the index rebounded to -11.8% on Friday, it still shows the market's preference for upside risks. Analyst Markets&Mayhem pointed out:
"The call skew for MSTR is so frenzied that it's almost unimaginable. Unless BTC continues to rise in a parabolic manner, we may see a much larger correction."
The TheMarketEar analysis service described this sentiment as an "extreme upside panic" and warned investors to be cautious.
