The cryptocurrency market is witnessing an influx of speculative trading, particularly with meme coins like DOGE, PEPE and BONK experiencing extraordinary gains. 

November 2024 has marked a significant milestone for Bitcoin, with its price soaring to $94,105. This unprecedented growth has been driven by global events and heightened social media discussions, with predictions of six-figure valuations. Historically, peaks in social media chatter often precede market corrections, signaling traders to exercise caution. Currently, while whale accumulation remains strong — with wallets holding over 10 Bitcoin adding 53,006 more BTC in just one month — retail traders remain surprisingly cautious. This wary sentiment contrasts sharply with the bullish behavior usually seen during price surges, suggesting a potential correction.

The cryptocurrency market is witnessing an influx of speculative trading, particularly with meme coins like DOGE, PEPE and BONK experiencing extraordinary gains. Despite their volatility, these tokens reflect a broader appetite for high-risk investments. Notably, whale investors holding 1M–100M DOGE are accumulating, while smaller holders are selling, creating conditions for potential breakouts. However, if new capital stops flowing, these speculative assets could face significant downturns. Additionally, while discussions around Bitcoin reaching $100K are increasing, they haven’t reached the levels seen earlier this year, indicating that fear of missing out (FOMO) may not yet be fully realized.

Institutional Interest and Ethereum's Resurgence

Demand for Bitcoin ETFs has surged, with daily trading volumes hitting a record $8.21 billion, signaling increased institutional interest. This activity often coincides with market peaks, but could also indicate new investments flowing into the crypto space. Meanwhile, Ethereum has also gained momentum, breaking above $3,100 for the first time in over 14 weeks. Additionally, whale accumulation is on the rise, suggesting that as Bitcoin leads the market, profits may soon be redirected into Ethereum. In contrast, Solana's price movements remain highly sentiment-driven, with funding rates indicating potential entry points for investors. Overall, altcoins are experiencing growth, particularly following the U.S. elections, which have reignited optimism in the crypto market.

Advanced

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Bitcoin's Resurgence: Analyzing Market Dynamics and Speculative Trends in November 2024

Crypto market makers play a crucial role in providing liquidity by consistently placing buy and sell orders. Learn more about how they work here.

The cryptocurrency market is notorious for its high volatility and sometimes low liquidity, making it a challenging environment for traders and investors. Executing trades can be difficult, often resulting in significant price 

Market making is a strategic approach that provides the necessary liquidity to stabilize markets, ensuring smoother trades and reducing volatility. By creating buy and sell orders around the current market price, market makers help maintain a healthy trading ecosystem. This article examines the fundamentals of market making, its benefits for traders and exchanges and the way it enhances the overall efficiency of the cryptocurrency market.

A crypto market maker is an entity or individual who primarily provides liquidity in cryptocurrency markets by continuously placing buy and sell orders for digital assets. This activity ensures efficient trading and helps maintain stable prices.

Crypto market makers play a key role in keeping markets liquid by continuously placing buy and sell orders on exchanges. Here's a closer look at how they operate.

Key Characteristics of a Crypto Market Maker

Crypto market makers provide liquidity and stabilize prices in the cryptocurrency market. The following are the key traits that enable them to operate effectively.

Market makers continually place buy and sell orders, ensuring the availability of transactions for traders. This constant availability reduces wait times for trades and minimizes the price impact of large orders, making the market more efficient and accessible for everyone.

One of the fundamental roles of market makers is that of managing the bid-ask spread. By consistently quoting competitive prices, they narrow this spread, thereby enhancing trading efficiency and reducing costs for other market participants. This spread is also their primary source of profit.

Market makers leverage advanced algorithms and HFT strategies to analyze market conditions and optimize their order placements. This technology allows them to react swiftly to price changes and maintain a balanced inventory of assets, which helps to manage risk and maximize profitability.

Due to the inherent volatility of cryptocurrency markets, effective risk management is vital for market makers. They employ various techniques, such as hedging and real-time market analysis, to minimize exposure to sudden price swings. This ensures their operations remain stable even in the face of market fluctuations.

By providing continuous liquidity and facilitating smooth trading operations, market makers enhance overall market efficiency. Their presence attracts more traders, which increases transaction volumes, boosts exchange activity and contributes to a healthier trading environment.

Given the quickly evolving nature of the cryptocurrency landscape, market makers must be adaptable, continually refining their strategies in response to new technologies, regulatory changes and shifts in market dynamics. This ensures they remain competitive and relevant.

Crypto market makers play a critical role in the cryptocurrency ecosystem by providing liquidity and stabilizing prices. Despite the integral role they play, however, their operations come with both advantages and disadvantages. 

Additional Importance of a Crypto Market Maker

Crypto market makers play a vital role in maintaining the efficiency and stability of the cryptocurrency market. Their presence on crypto exchanges ensures trading environments operate smoothly. 

Newer and smaller cryptocurrencies often struggle with liquidity. Market makers provide a market for these assets, promoting their growth and creating a more diverse and dynamic crypto ecosystem.

Through continual quoting of prices, market makers aid in fair price discovery, ensuring that cryptocurrency prices reflect actual market demand rather than extreme fluctuations. This promotes a more trustworthy and transparent trading environment that allows traders to make data-backed decisions. 

Crypto market makers are essential players in the cryptocurrency ecosystem, providing liquidity, stabilizing prices and ensuring smooth trade execution. Their use of advanced algorithms and real-time order placements encourages a more efficient, accessible and fair market. However, risks such as market manipulation, potential capital loss and lack of regulation can be problematic. Overall, the role of market makers in supporting emerging assets and maintaining market stability makes them indispensable for a healthy and growing crypto environment.

Intermediate

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Crypto Market Maker: Boosting Trades With Strategic Liquidity

SEC Chair Gary Gensler announced he will resign on January 20, 2025, coinciding with President-elect Donald Trump's inauguration.

The S&P 500 rose 0.53% as investors shifted toward cyclical stocks expected to benefit from a strengthening economy, while technology shares lagged. Coindesk Indices, an index measuring broader cryptocurrency market performance was up by 4.79%, with Bitcoin and Ether rising by  4.19% and 8.75%, respectively in the past 24 hours.

Today's top performer is XRP, which surged 24.3% following the partnership between Ripple and MCSocialVenture to boost financial resilience and access in emerging markets.

Ripple (XRP), launched in August 2012, is a blockchain technology company focused on improving international payments with its cryptocurrency, XRP. 

, focused on investing in emerging market entrepreneurs. The initiative will pilot financial resilience and humanitarian solutions built on the XRPL, aiming to advance equitable access to finance.

Check Out the Latest Prices, Charts, and Data of 

 he will resign on January 20, 2025, coinciding with President-elect Donald Trump's inauguration. Gensler, whose term runs until 2026, faced pressure from the crypto lobby due to the SEC’s strict regulatory actions against the industry, including high-profile cases against Coinbase and Binance. Gensler’s departure is seen as a victory for crypto advocates, who hope the next SEC chair will be more crypto-friendly. Trump has hinted at firing Gensler on his first day in office and is expected to appoint a chair with expertise in crypto, such as Mark Uyeda, Hester Peirce, or Chris Giancarlo.

Yesterday, BTC Spot ETF data revealed a net inflow of $396.7 million, driven by $404.5 million from non-GBTC sources, partially offset by a $7.8 million outflow from GBTC..

 for those who participated. To claim, visit 

 using code B0FKOP. Additionally, Morph Zoo Season 2 has launched on mainnet, allowing users to earn points by bridging ETH or executing transactions on Morph. The Bitget Wallet offers a 1.2x multiplier on points to maximize rewards.

Beginner

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SEC Chair Gary Gensler to Resign on Inauguration Day, Marking a Win for Crypto Lobby

Traders seem to expect BTC’s momentum could slow down a bit after the price hit over $97,000.

Positive sentiment has continued to fuel the cryptocurrency market as the expectation of further institutional adoption of 

 keeps growing. Options trading of BlackRock’s Spot Bitcoin ETF IBIT 

 with a bang, attracting almost $2 billion on the first day of trading. The hope of more spot ETF derivatives to change the market structure with additional institutional money onboarding crypto is high.

, we explored the possibility of the market being overleveraged, which could be painful if the current leverage unwinds. Data from CryptoQuant shows that the estimated leverage of the current BTC markets has reached another YTD high.

Derivatives data on Bybit shows that traders seem to expect that BTC’s momentum could slow down a bit after the price hit over $97,000, and are focusing more on downside protection.

Figure 1: Bitcoin estimated leverage ratio at 0.23. Source: CryptoQuant

BTC Options Open Interest Returns to Previous High While Perps Are Catching Up

Derivatives traders have been actively participating in BTC markets as 

 on Bybit has surged to over $3 billion, on par with the previous high on Nov 14, 2024. Although the options OI has increased, it still hasn’t surged above the previous high. At the time, BTC’s price had already jumped to over $97,000. If the OI doesn’t follow suit and break above the previous high in the coming days, this could be a sign that the market could become a bit exhausted — something for all market participants to be aware of.

Figure 2: Daily open interest for BTC options on Bybit. Source: Bybit

 have also seen increased open interest in recent days. Perpetuals have been among the most favorable products for day traders and short-term speculators. Rising open interest could indicate that more traders are looking for short-term profit, which could bring additional volatility to the market. 

Figure 3: Daily open interest for BTCUSDT Perpetuals on Bybit. Source: Bybit

Dec 27, 2024 remains the most popular expiration date for BTC Options on Bybit, with most of the open interest there. Within that expiration, $120,000 calls had the most OI, and $100,000 calls accumulated the second-largest OI. 

Figure 4: Open interest by strike for BTC Options with a Dec 27, 2024 expiration. Source: Bybit

Meanwhile, the market’s optimism that BTC will hit $100,000 by the end of the year seems to support the current price momentum. Shorter-dated options could show that traders are also looking for downside protection. The Bybit 

 page shows that BTC Options with a Nov 29, 2024 expiration have a strong 24-hour inflow to $90,000 puts. This could indicate that some traders are also anticipating some degree of price correction by the end of the month. 

Figure 5: 24-hour volume by strike for BTC Options with a Nov 29, 2024 expiration on Bybit. Source: Bybit

 for BTC Options on Bybit also indicates a possible downside protection in play among options traders. A smirk skew, or left skew, is a skew curve that’s steeper on one side (the left side) than the other. Traditionally, a smirk skew curve could mean that traders have been protecting their portfolios against a possible declining market. At the time of this writing (Nov 21, 2024), BTC Options contracts on Bybit with Nov 29, 2024 and Dec 27, 2024 expirations have both shown a smirk skew. However, this doesn’t necessarily mean traders are bearish on the price, and could just be part of the trading strategy. For example, traders could set up collars by buying out-of-the-money (OTM) puts and selling OTM calls simultaneously, so that they can profit in case BTC’s price drops, gain upside exposure and potentially offset the cost of buying the puts. 

Figure 6: Implied volatility of BTC Options with Nov 29, 2024 and Dec 27, 2024 expirations. Source: Bybit

The current BTC leverage trading may be complex, but tells a revealing narrative about market sentiment. The divergence between high leverage and increased hedging activities also reminds us that market dynamics are rarely straightforward, and adopting a 

 seems increasingly important in this diverse market.

: Investing in cryptocurrencies and their derivatives involves substantial risk of loss, and isn’t suitable for every investor. This article provides facts for educational purposes only, and does not represent any financial advice. Prior to making any investment decisions, please ensure you fully understand the risks involved and seek independent advice if necessary. Our customer support team is available to assist you with any inquiries.

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Learn From Smart Money: BTC’s Leverage Remains High as Traders Hedge Against Downside Risks

Bybit Learn

DeFi

From improving liquidity to expanding upon scalability, DeFi 2.0 is here to stay. Read on to learn how it improves upon DeFi's original shortcomings.

The first wave of decentralized finance, collectively known as DeFi 1.0, gave people a way to invest and exchange cryptocurrency outside of traditional, centralized markets. Now, a new generation of decentralized initiatives is taking shape, and it’s already been dubbed DeFi 2.0. This in-depth guide will answer the question, “What is DeFi 2.0?” It will also explain DeFi 2.0 vs. DeFi 1.0 and describe how to invest in DeFi 2.0, giving you the knowledge you need to capitalize on the latest innovations in 

DeFi 2.0 is a collection of decentralized finance projects that aim to improve on the previous efforts of DeFi 1.0. The movement focuses on making improvements in the areas of liquidity, scalability, governance and security.

Any investigation of this topic needs to start with the question, “What is DeFi 2.0?” From there, the natural follow-up is, “How is DeFi 2.0 different from. DeFi 1.0?”

While the idea of DeFi 2.0 vs. DeFi 1.0”suggests two separate ideas, it’s worth remembering that they spring from the same general theory. Both DeFi 1.0 and DeFi 2.0 are iterations of a single notion: The idea that blockchains allow for a decentralized finance ecosystem which bypasses traditional centers of financial power.

“DeFi” in general refers to a collection of decentralized applications that use smart contracts and secure oracle networks to conduct finance without intermediaries. DeFi 2.0 remains true to this central premise, but makes adjustments to overcome some of DeFi 1.0’s principal shortcomings.

As crypto enthusiasts flocked to DeFi applications, they couldn’t help but notice considerable limitations. For one thing, liquidity was hard to come by. The fact that providing liquidity required users to lock up their funds led to an undesirable amount of financial rigidity and capital inefficiency. DeFi protocols also had notoriously complicated user interfaces, meaning few beyond experienced crypto traders could navigate the applications. The protocols’ reliance on Ethereum caused further complications, as the blockchain’s increasing popularity produced slower transaction times and higher fees.

When considering DeFi 2.0 vs. DeFi 1.0, you need to remember that DeFi 2.0 represents a concerted effort to overcome some of these central difficulties. While the DeFi ecosystem is still far from perfect, a few key improvements are already apparent. Once you understand them, you’ll be ready to learn how to invest in DeFi 2.0.

DeFi 2.0 Creates Stronger Connections Between Users

If you’re thinking about what DeFi 2.0 protocols are — and how they’re different from more traditional financial applications — DeFi 2.0 protocols are essentially decentralized financial applications that endeavor to connect users who contribute liquidity. These applications promote the types of horizontal connections that foster lasting relationships. This, in turn, will produce a DeFi ecosystem that’s decentralized but still interconnected.

DeFi 2.0 Uses Optimized Governance Patterns

Governance is a key issue in any decentralized endeavor, and DeFi 2.0 is based on better administrative solutions. In DeFi 2.0 protocols, community members cooperate to make decisions and create policies. This democratic process allows frameworks to develop without relying on a powerful arbiter.

DeFi 2.0 Includes User-Friendly Incentive Schemes

Decentralized finance can only survive with liquidity, and DeFi 2.0 projects are employing creative incentive programs to acquire and maintain sufficient capital. Not only do incentives help solve the liquidity problems that plagued DeFi 1.0, but they also foster connections between users, thus helping to produce more cooperative communities.

DeFi 2.0 Promises a More Sustainable Ecosystem

If there’s one thing you should understand after asking what DeFi 2.0 is, it’s that the new decentralized protocols are being designed with an eye toward sustainability. This is also the key factor in the “DeFi 2.0 vs. DeFi 1.0” discussion. The combination of liquidity, interconnectedness and sound governance should create a decentralized ecosystem that can last. This sustainability will allow DeFi 2.0 projects to gather further momentum, attract more users, and redefine finance on a larger scale.

You can answer the question, “What is DeFi 2.0?” without knowing how the associated protocols operate. A quick overview of DeFi 2.0 vs. DeFi 1.0 is enough to explain the basic idea behind the latest iteration of decentralized finance, but a more in-depth discussion demonstrates exactly how investors can benefit from DeFi 2.0.

There are several features unique to DeFi 2.0 that make the movement a more appealing target for crypto investors. From smart contract insurance to self-repaying loans, these novel ideas lay the groundwork for a sustainable DeFi ecosystem.

In the DeFi 2.0 vs. DeFi 1.0 discussion, one of the biggest issues is user-friendliness. DeFi 2.0 protocols often allow investors to take out insurance on their smart contracts. This is a significant source of protection, especially for novice investors.

Many people would love to stake LP tokens in a smart contract but worry that the contract could become compromised. They know that a compromised contract is impossible to rectify on the blockchain, and they lack the technical nous to protect their investments on their own. An insurance policy allows them to stake tokens without any concerns. Not only does this help individual investors, but it also encourages the influx of more capital into the protocol.

DeFi 2.0 projects are introducing new measures to mitigate this inherent risk. Some protocols use the proceeds from fees to insure users against impermanent loss. They can also mint new coins to make up for losses. All of these policies make DeFi a safer option for crypto investors.

The DeFi 2.0 ecosystem allows for a remarkable financial maneuver in which loans pay for themselves. A lender can provide a user with a loan in exchange for collateral in the form of a small deposit. This deposit is then invested by the lender, who goes on to earn interest. Once the lender has earned the full price of the initial loan, they return the deposit, and the loan recipient ends up not having to repay the loan.

Most people who ask, “What is DeFi 2.0?” are also curious about any risks that might be associated with investing in the movement. While this second iteration of DeFi is generally safer than its predecessor, there’s still no guarantee that every investment will prove successful. Even the best DeFi 2.0 projects have inherent drawbacks, and investors should be aware of any potential pitfalls before staking tokens. Once you’ve learned about the main risks, you’ll understand more about how to invest in DeFi 2.0.

Crypto investors can’t be completely sure that the smart contracts they’re interacting with won’t be hacked. Before staking tokens, always investigate the project thoroughly. Even after you’ve done your due diligence, a surprising hack could occur. Luckily, insuring your smart contracts can help limit the damage in case of illegal activity.

As decentralized finance attracts users and more people learn how to invest in DeFi 2.0, governments around the world will become increasingly eager to get involved. Many governments will try to impose regulations on DeFi 2.0 protocols. As an investor, it’s important to recognize that your future activities might be affected by rules and limitations that don’t yet exist. While this concern shouldn’t scare you off from participating altogether, it’s certainly something to keep in mind as you discover how to invest in DeFi 2.0.

We’ve answered our initial question, “What is DeFi 2.0?” We’ve also learned about DeFi 2.0 vs. DeFi 1.0. Now, it’s time to learn how to invest in DeFi 2.0. Decentralized finance involves several types of maneuvers that may be unfamiliar to crypto newcomers. Once you’ve learned a bit about common investment strategies, you’ll have a better understanding of the general DeFi 2.0 ecosystem.

If you were at all familiar with decentralized finance before learning what DeFi 2.0 is, you might have questioned how the new movement deals with yield farming. This mechanism, a key innovation of DeFi 1.0, has become even more useful for investors in the latest installment of decentralized finance.

As with older projects, DeFi 2.0 protocols use yield farming to get liquidity from users. However, they go even farther by letting investors use tokens as collateral for loans. This twist on yield farming makes the protocols a more enticing option for investors.

Self-repaying loans represent wonderful opportunities for lenders and loanees alike. Offering loans in exchange for interest payments is a great way to engage in yield farming within a DeFi 2.0 protocol.

Liquidity provision gives crypto holders an easy way to profit from their holdings. With this maneuver, holders pass some of their cryptocurrency to a liquidity pool so that users can trade against it. In exchange, the holder who provides the currency receives a fee. These types of simple, win-win transactions allow DeFi 2.0 protocols to attract liquidity while users earn a profit.

Anyone asking about DeFi 2.0 is likely to be equally curious about DAOs, the autonomous organizations that provide the basis for most decentralized finance. Investors can join a DAO by purchasing the organization’s token. Once you’ve bought yourself into the community, you should have a say in governance. This direct participation represents a motivation for learning about how to invest in DeFi 2.0.

If you want to know how to invest in DeFi 2.0, you need to have a basic understanding of the existing projects. While there are too many protocols to list them all, this guide will introduce you to some of the most important undertakings.

If there was a single project you’d heard of when you first wondered about DeFi 2.0, it was probably Olympus DAO. This decentralized reserve currency protocol set new standards in DeFi and became the starting point for DeFi 2.0. Investors can use the project for all sorts of yield farming, from staking to purchasing bonds. The organization is especially famous for its unique, user-friendly bonding model.

For DeFi beginners trying to understand DeFi 2.0, it’s simply a movement that seeks to improve on DeFi 1.0 by freeing up additional liquidity, fostering more connections between users and creating a sustainable financial ecosystem. In considering DeFi 2.0 vs. DeFi 1.0, remember that the latest iteration of decentralized finance represents a major improvement, but it hasn’t been perfected yet. From here, you can employ your newfound understanding of how to invest in DeFi 2.0.

What Is DeFi 2.0, How It Improves on DeFi 1.0 — and How to Invest in It

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