Our monthly report delves into insights from options volatility to inspire your next crypto move.

: April 2025 saw BTC's implied volatility surge above 75% due to tariff chaos, but it collapsed to 35% within a week, indicating a surprising short-term drop in volatility expectations despite ongoing macro uncertainty.

: BTC's return above $100K was met with muted enthusiasm in the derivatives market, suggesting that 

traders no longer view this level as a significant psychological barrier, and the rally isn’t likely to be sustained.

: ETH significantly outperformed BTC with a 23% rally, leading to increased demand for short-dated calls and a positive shift in the options market, highlighting renewed bullish sentiment.

: Historical trends suggest a potential summer lull in volatility in store for BTC, raising questions about whether this pattern will repeat in 2025 amidst ongoing macroeconomic challenges.

Bitcoin’s volatility plunges in late April

April 2025 witnessed significant volatility in the cryptocurrency market, particularly influenced by US trade policies. As President Trump announced steep reciprocal tariffs, the crypto landscape experienced sharp fluctuations. Bitcoin (BTC) initially demonstrated resilience, despite widespread sell-offs in equities and the US dollar, only to succumb to a decline from $88K to $75K by early April. This period was characterized by a dramatic rise in implied volatility that peaked above 75% as traders sought protection through short-dated puts. However, as the tariffs faced moderation, implied volatility plummeted to 35% by mid-April, marking the lowest level since early March.

Interestingly, while short-tenor volatility collapsed, 

the back end of BTC's term structure remained elevated, signaling that market participants expect heightened volatility in the mid-term

. Amidst this backdrop, realized volatility fell below the five-year seasonal average, paralleling similar trends in previous years and suggesting a 

. The historical pattern contrasts that BTC often experiences a rebound in volatility heading into May, raising questions about whether this trend will persist.

Subdued derivative response suggests Bitcoin rally might not endure

The market's reaction to BTC's resurgence above the $100K threshold was notably subdued compared to previous instances. While BTC rallied 20% following the initial tariff sell-off, the derivatives market displayed a muted response. The 25-delta put/call skew, a measure of market sentiment, indicated only a slight bias toward out-of-the-money calls, contrasting sharply with sentiment previously when BTC first breached the $100K mark in December 2024. This lack of exuberance suggests that traders no longer view $100K as a significant inflection point, raising concerns about the sustainability of the rally. 

Meanwhile, funding rates and implied volatility — though still bullish — didn’t reach the extremes observed in earlier months, indicating more cautious market sentiment. The relationship between BTC's spot price and implied volatility suggests that although traders are optimistic, they’re waiting for BTC to approach previous all-time highs before adjusting their volatility expectations.

Ethereum's option data points to further rally

In stark contrast to BTC, Ethereum (ETH) displayed remarkable resilience and outperformed major cryptocurrencies, gaining 23% overnight following favorable trade news. This rally catalyzed a surge in demand for short-dated calls, pushing front-end volatility expectations significantly higher. The response from the derivatives market was robust, inverting the term structure and indicating renewed bullish sentiment toward ETH, even as it’s trading well below its all-time high.

The ETH options market exhibited a shift from neutral to slightly negative skew, to a 10% bias favoring out-of-the-money calls, reflecting the market's confidence in ETH's potential to regain lost ground. Despite overall macroeconomic uncertainty, the demand for ETH options suggests that traders are optimistic about Ether’s future price movements.

In conclusion, April 2025 highlighted the complex interplay between macroeconomic factors and cryptocurrency market dynamics. While BTC faced challenges in eliciting strong responses from derivatives markets upon recrossing the $100K threshold, ETH's performance indicated a divergence in market sentiment. As traders navigate the evolving landscape, the potential for seasonal volatility patterns and the influence of macroeconomic developments will remain critical factors in shaping future market expectations.

Advanced

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Bybit X Block Scholes options volatility report (April 2025): Data suggests Bitcoin rally might not endure, but Ether sees further upside

Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

After mostly trading sideways at the end of April 2025, a US-UK trade deal sparked a crypto rally. BTC surged past $100K for the first time since February, but it’s ETH's performance that captured the derivatives market's attention. 

A 23% increase in ETH's spot price led to an inverted term structure and a spike in front-end volatility. The put/call skew for ETH shifted from a bearish bias to a nearly 10% skew toward OTM calls. Other sentiment indicators, such as perp funding rates and futures yield, also supported the rally. In contrast, while BTC's funding rates and skew have increased, its implied volatility remains low at 40%, over 30 points below ETH's 7-day implied volatility.

Please check out the report’s highlights.

ETH’s record performance since 2021 was propelled by positive term structure

ETH has significantly outperformed BTC and the top 10 cryptocurrencies, marking its largest single-day gain since May 2021. The options market has reflected this enthusiasm, with implied volatility for short tenors rising sharply and inverting ETH’s term structure, thus contrasting with BTC's muted, positively sloped structure. The 7-day tenor for ETH is now trading at a 33-point premium over that for BTC. 

While puts dominate BTC's open interest, ETH is seeing the opposite trend. On May 8, 2025, options volumes surged over $120M, more than double the typical monthly volume, with $60M more in calls than puts. ETH now boasts a positive futures curve and funding rates, as well as a strong skew toward OTM calls.

ETH sees exceptionally bullish put/call skew

ETH's substantial outperformance in the current crypto rally has led to bullish sentiment in its derivatives markets. Funding rates have surged, futures yields are strongly positive and the put/call skew has shifted significantly toward OTM calls, now close to 10%. This starkly contrasts with early April, when the skew was 20% toward OTM puts. Although ETH has underperformed (relative to BTC and other "ETH killers"), it has rebounded in this rally, with the ETH/BTC ratio rising after spending most of the year declining.

Open interest for Bitcoin options increased, with implied volatility remaining suppressed

The announcement of the new US administration's first trade deal, nearly 30 days into Trump's 90-day tariff pause, jolted crypto markets, pushing BTC back up above $100K. Surprisingly, implied volatility has remained suppressed, failing to invert BTC's term structure, with front-end volatility trading at around an 18-month low of 35-40%. On May 8, 2025, options volumes surged, with call volume reaching $189M, reversing last week's trend of higher put volumes. Meanwhile, open interest rose steadily to exceed $300M, the highest level this month, but remains significantly larger for puts than for calls despite the price increase.

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Bybit X Block Scholes crypto derivatives analytics report (May 9, 2025): Ether’s put/call skew turns remarkably more bullish than Bitcoin’s

This article explores how Sign works, its flagship products (such as TokenTable, SignPass and EthSign), its native token (SIGN) and how to trade SIGN on Bybit.

Sign is an omnichain attestation infrastructure that empowers users and developers to verify real-world claims on-chain. Built for a more transparent and decentralized future, it eliminates the need to “just trust” and enables everyone to verify with cryptographic proof.

This article explores how Sign works, its flagship products (such as TokenTable and EthSign), its native token (SIGN) and how to trade SIGN on Bybit.

 is an omnichain attestation protocol designed to make it easy for anyone to verify the authenticity of any claim — 

. Whether it’s a document, credential or user identity, Sign transforms traditional trust models into verifiable, cryptographic attestations. 

Sign’s mission is to replace outdated, opaque validation systems with transparent, 

 proof — enabling a future where “verify” replaces “trust.” Through tools like schema registries and digital signatures, Sign empowers users to bring accountability and integrity to digital interactions.

Sign is developed by the team behind EthSign, a 

-native e-signature and agreement platform. Its core team brings deep experience in 

 development and cross-chain integrations.

The project is backed by top-tier investors, including Sequoia Capital China (now known as HongShan Capital Group), Mirana Ventures, HashKey Capital and Hack VC.

This strategic funding positions Sign as a foundational layer in the web3 infrastructure stack.

Sign allows users to create attestations — cryptographically signed statements that prove the validity of claims, such as credentials, achievements or actions. These digital proofs can be verified by anyone at any time, making them tamperproof and transparent.

Sign’s key technical elements include a schema registry that ensures consistent data formatting, digital signatures proving authenticity, and on- and off-chain attestations with support for revocation or updates

This system acts like a programmable layer for web3, bringing a new level of trust to identity, credentials and data exchange.

TokenTable is Sign’s flagship token distribution platform. It helps projects unlock, distribute and manage tokens transparently and securely at scale.

It uses Sign’s attestation engine to verify token unlocks, 

 and vesting schedules, ensuring traceable, auditable token flows.

SignPass is a blockchain-based identity solution that brings real-world credentials on-chain. One notable implementation is the Sierra Leone PR Card, used for the world’s first government-approved on-chain permanent residency program.

SignPass offers encrypted on-chain records for easy 

 verification, physical ID issuance for daily identity use and streamlined digital application systems for cross-border access.

It showcases the way blockchain can modernize public sector services worldwide.

EthSign is a decentralized contract signing platform that lets users create, sign and store legally binding agreements directly on-chain. It removes intermediaries and ensures documents are immutable and accessible.

EthSign reinforces Sign’s mission by bringing traditional documentation into the realm of verifiable web3 attestations.

The SIGN token is the native utility token powering the Sign ecosystem. It’s used for:

The total supply is capped at 10 billion SIGN, with 1.2 billion tokens in circulation. While the fully diluted valuation (FDV) sits above $746 million as of May 7, the circulating market cap is approximately $89.6 million. SIGN continues to gain traction across exchanges and developer networks.

SIGN is available for trading on Bybit via Spot trading and as a USDT Perpetual contract. Bybit offers up to 75x leverage for the SIGNUSDT Perpetual contract and supports secure, high-liquidity spot trading.

Start exploring the future of attestations with SIGN on Bybit today.

Intermediate

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Sign (SIGN): Web3 protocol for trustless attestation

Compliant trading means following platform rules and avoiding manipulative behavior. Learn more about how you can trade responsibly and compliantly on Bybit.

Crypto trading has come a long way from what used to be the domain of institutional players, and is now open to almost anyone with an internet connection. It’s easier than ever to buy and sell digital assets, try new strategies or build a portfolio from scratch all within minutes.

But with that level of access comes responsibility. As more people join the market, the need for fairness and accountability has become even more important. This isn’t just about price charts or profits — it’s about keeping the playing field level for everyone involved.

At Bybit, we take that responsibility seriously. We're here to offer the tools, safeguards and education you need to help you trade responsibly and to protect the platform from misuse.

This article describes what it actually means to trade compliantly, why it matters — and what can happen if things go off course.

Compliant trading means playing fair, following the platform’s rules, staying within the boundaries of what’s allowed and avoiding anything that could unfairly affect the market.

It’s not about avoiding risk: it’s about knowing what you’re doing, using official tools the right way and making sure your trades aren’t causing harm to yourself or others.

In short, compliant traders don’t just focus on their P&L — they understand that how they conduct themselves while trading matters. Responsible trading protects their accounts, keeps the platform stable and builds long-term credibility in the crypto ecosystem.

Why does responsible and compliant trading matter?

It’s easy to assume that compliance is only something platforms or regulators need to worry about. But in reality, every trader plays a part. When someone attempts to exploit the system — for example, by coordinating mass trades through off-platform channels — the consequences can ripple across the entire market.

In extreme cases, irresponsible trading behavior can:

And if the trades in question are linked to coordinated action, use of fake accounts or external bots? That opens the door to account freezes, compliance reviews and, in some cases, permanent suspension.

Bybit has a responsibility to act when the system is being abused — not just for legal reasons, but in order to protect honest traders.

Common examples of noncompliant or risky behavior

Some traders join Telegram groups or online communities in which KOLs (key opinion leaders) give out coordinated trading instructions (for example, “Buy token A now, sell it in an hour”). This practice isn’t just risky: it often involves a small number of insiders benefiting while the majority end up with losses.

When many people follow the same instruction all at once, it can artificially inflate the price of a low-liquidity token. The KOLs then exit at the top —while others are left with falling prices and unexpected liquidations.

Such a textbook case of market manipulation violates our Terms of Service and, depending upon jurisdiction, could violate financial laws.

Using bots or unverified trading strategies

Some Telegram groups may seem convincing, but trades coordinated off-platform are often unverified and may serve someone else’s agenda. 

 programmed to front-run trades, mimic pump-and-dump strategies or follow unverified signals can trigger compliance red flags and may lead to account restrictions.

Bybit does not support trading bots from unverified sources. They can also trigger flags in our monitoring systems, which may result in account suspension.

Using another person’s account or sharing login credentials — even if it’s with a family member — goes against both Bybit’s policies and global 

(AML) rules. It also opens the door to fraud, loss of funds and irreversible penalties.

Tips for responsible and compliant trading on Bybit

The good news is that there’s a better way to trade — responsibly, safely and with confidence, starting with the right tools, mindset and habits.

Use copy trading the way it’s meant to be used

 is one of Bybit’s most trusted features, and for good reason. It gives users access to professional traders’ strategies while maintaining full transparency. However, it only works if you follow verified 

These traders have been vetted and their stats are fully visible. You can view their P&L, risk settings and trade history. Bybit also provides built-in tools, such as 

 and staking products allow you to earn passive yield with minimal effort. These products are fully backed by our infrastructure and undergo regular audits, and are a compliant way to generate returns without chasing risky trades.

No matter how convincing a Telegram group may sound, remember that trades executed outside of regulated channels are unverified and often unaccountable. They may be coordinated for someone else’s gain.

 offers a wide range of articles and tutorials, covering everything from indicators and oscillators to advanced portfolio strategies. Before following any external signal, it’s worth spending 10 minutes to understand the rationale behind it. In trading, knowledge is your best form of compliance. Before you enter any position, ensure that you fully understand the asset you're trading, the current market conditions and the risks involved.

, never share your login credentials, and always enable two-factor (2FA) authentication. In addition, all trading activity should originate from your own account and remain under your own control.

Bybit’s systems are designed to flag irregular behavior. If your account is found to be engaging in prohibited activity, even unintentionally, you may be:

We take these steps in order to protect the broader user base and to uphold market fairness.

Being compliant doesn’t mean missing out on opportunity. In fact, it’s the opposite. It means you’re using the platform the way it was designed, with safeguards, transparency and trust. Shortcuts might look appealing in the short term, but they rarely end well. The most successful traders on Bybit are the ones who understand risk, stay informed and trade with integrity.

Take the time to learn and use the tools available to you. And remember: protecting your account starts with choosing how you’ll trade.

Beginner

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How to trade compliantly and responsibly on Bybit

Bybit Learn

DeFi

Learn what a sandwich attack is in crypto, how attackers manipulate transactions on decentralized exchanges, and the key steps to protect yourself from this exploit.

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 (DEXs) offer crypto traders numerous opportunities and distinct advantages. At the same time, these platforms often attract malicious actors intent on causing harm and deriving profit at the expense of unsuspecting fellow traders. While 

 are often mentioned when discussing the unique threats on decentralized trading platforms, another type of malicious attack — a sandwich attack — gets far less attention.

In the most standard form of sandwich attack, a trader with sinister motives identifies a pending swap transaction on a blockchain and places two orders — one before and one after the targeted transaction — to manipulate the asset price. The culprit's goal is to buy the asset before the expected price increase, and then quickly sell it after the price inflation. The victim of the attack ends up purchasing the asset at the inflated price and then watches helplessly as its price plummets afterward.

Sandwich attacks — while less publicized than some other security vulnerabilities in the world of 

 (DeFi) — can still be devastating for traders who fall victim to these exploits. A trader unaware of being targeted by such an attack may quickly lose significant funds and get wiped out, especially if they actively place orders during the attack phase. 

The good news is that there are several measures that traders can implement to minimize the probability of becoming “filling” for the attacker's breakfast sandwich. In this article, we’re taking a closer look at sandwich attacks, their two main varieties and the key ways to avoid them.

A sandwich attack is a type of malicious transaction on DEX platforms whereby the attacker identifies a pending swap operation and places one order before and another right after the targeted transaction in order to manipulate the asset's price. 

The malicious trader "sandwiches" the pending transaction by simultaneously front-running and back-running it, hence the name. Their goal is to buy the asset chosen by the unsuspecting trader at a lower price, and then sell it immediately after their back-running transaction.

As a result of the sandwich attack, the victim buys the asset at an inflated price as compared to the expected execution price. After the back-run transaction, the asset price declines, and the victim ends up with an asset valued lower than what they paid for it. Depending upon the victim's trading volume and activity, losses from a sandwich attack — or a series of them — can be devastating. These attacks are pretty common on DEXs, although they receive less coverage than other forms of exploit, such as flash loan attacks.

Sandwich attacks can be considered a form of 

. However, unlike some other forms of arbitrage, these attacks directly harm traders who fall victim to them. The sandwich attacker intentionally manipulates the price — both before and after the victim's transaction — in order to profit at the victim's expense. As such, these attacks are nothing other than malicious market manipulation, and are widely condemned in the DeFi community.

Technically speaking, sandwich attacks are possible on decentralized trading platforms due to the public nature of blockchains. Every public blockchain keeps its pending transactions in the 

 area, a waiting room for transactions before they’re finally written to the blockchain's permanent ledger of records. Attackers are actively looking in the mempool for transactions that provide good potential for these exploits.

Let's consider how a typical sandwich attack might occur in practice. 

Let’s say a trader decides to place a swap order on an 

. A sandwich attacker spots the victim's transaction in the pending list, and quickly places a buy order for ETH, trying to get their own front-running transaction executed first. Due to the nature of blockchain technology, there are ways for the attacker to achieve this (for example by paying a higher gas fee to raise their own transaction's priority). By having their own transaction executed first, the attacker takes advantage of ETH's lower price. As a result of the buy order, the price of ETH in the trading pool increases.

Therefore, when the victim's order for swapping USDT for ETH goes through, the actual execution price differs from what they had hoped for — and ETH now costs more, so the victim receives the asset at an inflated price. The culprit also schedules another transaction, to be executed quickly after the victim's transaction. In this back-running transaction, the culprit sells ETH at the inflated price and pockets the profit. As a result of the sell transaction, ETH's price drops, and the victim now owns an asset valued lower than what they paid for it.

There are two main types of sandwich attacks. The most common one is the taker vs. taker scenario. Typically, sandwich attackers use 

 at AMMs to carry out their attacks. In the taker vs. taker scenario, swap operations are executed against the pool and the setup is as described above, with the malicious taker trying to manipulate asset prices by placing both a front-running transaction and a back-running transaction around the victim's order.

Attackers also use a modification of the standard sandwich attack by acting as 

. While liquidity takers attack using two transactions, attackers execute three orders in the liquidity provider vs. taker mode. 

In the first order, the culprit removes liquidity from the swap pool as a front-running method, increasing the 

 rates for the victim's order. In the second transaction, they execute the back-running method by adding the liquidity back to restore the initial pool balance. Finally, they swap the targeted asset — in our example above, ETH for the original asset, and USDT to restore the asset balance in the pool to the way it was before the attack.

By removing liquidity before the taker's trade, the liquidity provider avoids paying a commission fee (which is normally shared between all liquidity providers). This means the taker has to pay more, due to increased slippage, while the liquidity provider keeps their cut of the commission.

) are taking protective measures against sandwich attacks by introducing transactions that aren't visible in the mempool. Some platforms also protect users against 

 (maximal extractable value) bots, a type of bot frequently used in sandwich attacks. However, any DeFi trader should also take their own precautionary measures to minimize the risk of falling victim to these attacks. Below, we list some proactive ways you can use to avoid your funds becoming a succulent sandwich filling in a malicious attack.

Slippage rates are the difference between the expected and actual cost of a swap transaction on decentralized protocols. Many DEX platforms allow you to set acceptable slippage rates for your swap trades. Use this option actively, as the price slippage aspect features prominently in sandwich attacks (particularly in the liquidity provider vs. taker variation).

Larger liquidity pools are less affected by sandwich attacks, thanks to their having ample funds floating around. The smaller the pool you use, the more pronounced the price swings caused by sandwich attacks — and more extreme price swings will mean one very unpleasant thing: larger losses from these attacks. 

Note, however, that sandwich attackers are most active on large DEXs, such as 

 (SUSHI). Therefore, it's less about the size of the platform and more about liquidity volumes in a specific pool. Sandwich attackers love low-liquidity pools at large DEXs. Thus, don't be deceived by a platform's large industry footprint or reputation. Pay close attention to the actual liquidity levels typically available in the pool you're interested in.

 may be helpful, as they distribute a single trade across multiple liquidity pools, which can mitigate the impact of sandwich attacks by reducing the likelihood that a single pool is targeted. Additionally, as DEX aggregators aim to execute more efficient trades, you’re more likely to experience lower slippage when using them.

One of the key ways sandwich attackers carry out their sinister trade is by paying higher 

 on a blockchain. By doing so, they often ensure (though never guarantee) that their front-running transaction will be executed before the victim's trade. You can reduce your vulnerability to these attacks by paying a higher gas fee to have your transaction processed by miners before the malicious front-running order is executed.

 (CEXs), including Bybit, are immune from sandwich attacks, as this type of attack is unique to DEXs. While the measures above may minimize (though never eliminate) the risk of such attacks, conducting your trades on a CEX is the only reliable way to completely avoid the possibility of becoming prey to sandwich attackers.

Sandwich attacks exploit the inherently asynchronous nature of transaction ordering on blockchain. While not as high-profile as prominent flash loan attacks, they are ubiquitous on DEXs and cost traders dearly. Luckily, there are several ways to minimize the potential threat from these attacks. By tightly controlling your slippage rates, using larger liquidity pools, paying higher gas fees to elevate the priority of your orders and using CEX platforms, you can significantly reduce the risk of falling victim to sandwich attacks.

What Is a Sandwich Attack in Crypto and How to Protect Against It

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