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JPMorgan’s retail sentiment indicator for Bitcoin reached an all-time high of 4 following strong inflows into US-listed spot Bitcoin ETFs after Donald Trump’s election victory.
Key Notes
The surge in Bitcoin's retail highlights intense retail enthusiasm, with demand for Bitcoin ETFs.Despite Bitcoin hitting an all-time high of $93,000, significant outflows from spot Bitcoin ETFs and heavy miner selling drove the price down.Besides, Bitcoin holder MicroStrategy (MSTR) stock saw unprecedented bullish sentiment in its options market.Following the US Presidential elections and Donald Trump‘s victory on November 5, Bitcoin BTC $92 018 24h volatility: 1.0% Market cap: $1.82 T Vol. 24h: $55.45 B and other altcoins have been on a massive fire. However, JPMorgan’s retail sentiment indicator for Bitcoin suggests that there’s an absolute frenzy in the market and investors should brace for volatility moving ahead.
The bank’s retail sentiment score for Bitcoin surged to a record high of 4 soon after BTC price hit its all-time high above $93,000 last week amid strong inflows in US-listed spot Bitcoin ETFs. The measure aims to assess retail investor sentiment toward cryptocurrencies, particularly Bitcoin, by analyzing activity across the range of BTC-related products, including spot ETFs. In a note to investors last week, the JPMorgan equity research team wrote:
“Within ETF space, demand for Bitcoin ETFs was particularly strong (IBIT +3.4z) following the election results. The demand for Bitcoin was also reflected in COIN (+6z). In fact, their sentiment score for the Bitcoin family (for both physical ETFs and others) soared to a multi-sigma high.”
Courtesy: JPMorgan
In the last two days of last week, the outflows from spot Bitcoin ETFs surged significantly. This along with high Bitcoin miner selling pushed the BTC price to $87,000 before regaining $90,000 once again over the weekend. This shows that there’s a tough fight between the bulls and the bears at this stage.
Bitcoin Holder MicroStrategy (MSTR) Also Sees Bullish Action
Furthermore, Bitcoin-holder MicroStrategy witnessed a massive rally recently hitting fresh all-time highs. The MSTR stock is also trading at a massive premium over Bitcoin for a long time and continues to be in demand amid the aggressive BTC purchases coming from the company.
The options market linked to MicroStrategy Inc (NASDAQ: MSTR) shares, a major Bitcoin holder, displayed unprecedented bullish sentiment, reflecting the kind of intense trading typically seen near market peaks.
On Wednesday, the one-year 25-delta put-call skew plunged to -26.7%. This indicated that call options, often used to hedge against or capitalize on price increases, were trading at a significantly higher premium compared to puts, which protect against downside risks. The data, sourced from Market Chameleon, was shared by pseudonymous analyst Markets&Mayhem on X.
Although the skew improved to -11.8% by Friday, it still exhibits a solid bias for the upside bets. Bitcoin calls have been trading at much premium to the puts, however, the differential has been narrowing slowly.
“Call skew in MSTR is so wildly euphoric that it is hard to imagine we don’t see a more meaningful drawdown unless bitcoin continues to move in a parabolic fashion higher. For now, it appears to be cooling off just a little bit from its highs,” Markets&Mayhem wrote.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
