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

Options

Zero days to expiration options (0DTEs), often referred to simply as zero-day options or zero-DTE options, are a type of financial derivative contract.

While trading zero days to expiration options isn’t new, its glamorization has gained plenty of traction, thanks to the spread of screenshots across social media featuring impressive gains and profits from trading such derivatives. From a mainstream media perspective, it seems that retail traders are becoming increasingly interested in the highly volatile derivative that is zero-day options. 

 as they buy up S&P 500-related contracts. Whether they’re driven by the fear of missing out (

) or greed, we may be seeing an entire mindset shift in the way retail traders are embracing the volatility of 0DTE options. From understanding the potential profits that can be reaped from the highly volatile derivative to grasping the risks involved when trading them, here’s everything you need to know when it comes to trading zero-day options in the crypto market.

What Are Zero Days to Expiration Options?

Zero days to expiration options (0DTEs), often referred to simply as zero-day options or zero-DTE options, are a type of financial derivative contract. What sets them apart from traditional derivatives is their incredibly short lifespan. Unlike traditional 

, which may expire in weeks or months, zero days to expiration options have an expiration period of just one trading day.

As 0DTEs tend to lead to significant volatility in option premiums throughout their lifespan of a single trading day, they’re often only traded by those experienced in crypto options trading. Labeled by some to be the "extreme sport" of the traditional options market, zero-day options are extremely time-sensitive, and require active monitoring by traders in order to avoid losing out on gains made from their options trades.

How Do 0DTE Options Differ From Traditional Options?

To better grasp the concept, let's compare 0DTE options with traditional crypto options. Traditional options contracts offer traders the right, but not the obligation, to buy (

) an underlying asset at a specified price (strike price) on or before a predetermined expiration date. Whether these crypto options are used for 

, they ultimately provide ample time for market conditions to evolve and for the options to gain or lose value over time.

Zero days to expiration options, on the other hand, cut out all the time between the purchase and the expiration. They’re settled on the same day they’re traded. This means that the price of the underlying crypto asset must move quickly and significantly in the desired direction in order for the crypto trader to profit from the risky trade. Due to the short lifespan of these options, they’re significantly cheaper than their traditional counterparts that have weeks or months to expiration.

One of the primary benefits of 0DTE options is their capital efficiency. Since 0DTEs have a very short duration, traders can allocate a smaller amount of capital as compared to traditional options. To further leverage their trades, crypto options traders tend to purchase out of the money (OTM) options contracts, which can be even more affordable given their low delta. This allows for more aggressive trading and risk management strategies, offering crypto traders the chance to make profits worth multiples of the capital they’ve committed to a trade.

Time decay, also known as theta, is part of the 

 and is a significant factor in options pricing. Traditional options lose value as time passes, but this effect is greatly reduced in zero days to expiration options. Since they expire the same day they’re traded, time decay has minimal impact, and crypto options traders can focus more on the directional movements of the underlying asset.

Risks Associated With Zero Days to Expiration Options

While 0DTE options are affordable and capital-efficient, they come with the trade-off of high volatility. They’re exceptionally sensitive to price swings in the underlying asset, which can lead to both rapid gains and losses, making them unsuitable for risk-averse traders who aren’t used to such volatility.

Traditional crypto options offer the luxury of time for traders to adjust their positions or strategies as market conditions change. This can include repairing an options trade by rolling the contract forward, or doubling down on an already established position. Unfortunately, 0DTE traders don’t get to enjoy this luxury. Once you enter a position, the clock is ticking as theta decay kicks in, and there's very little time to react to adverse movements in crypto prices.

How to Trade Zero Days to Expiration Options

While trading zero days to expiration options may sound simple, the risk of options trading is compounded, thanks to the huge volatility in option premiums and the chance of your purchased options contracts expiring worthless. To make 0DTE options trading more manageable, we’ve compiled some tips to give you a better understanding of what you’re getting yourself into — and to better prepare you for the possible risks ahead.

Trading zero days to expiration options requires careful selection of the underlying asset. It's crucial to choose assets known for their intraday volatility. Popular choices often include certain stocks, exchange-traded funds (

) or indices. With crypto options now becoming an increasingly popular niche among crypto traders, you’re free to explore all kinds of option strategies with Bitcoin and Ether acting as the underlying asset of said contracts. 

As ETH tends to behave more erratically as compared to BTC, the preference of choosing the right underlying asset ultimately depends upon your risk appetite and how comfortable you are with potentially owning the underlying asset. This might happen if the options contracts expire in the money (ITM). Find out more with Bybit’s 

Trading zero days to expiration options demands proper 

. Experienced crypto options traders often use techniques such as 

 to navigate through the volatility and come out on top. As these strategies rely on quick market movements and precise timing, 0DTE option trading tends to shine because gains and profits are maximized when a trade goes well.

Find the term “weeklies” familiar? If you’ve traded crypto options long enough, you’ll likely hear about weekly options, and how they’re also regularly days-traded. It's worth noting that zero days to expiration options aren’t the same as weekly options, which have longer expiration periods of about five trading days. While such weekly options provide more leeway as compared to zero-day options, they’re still shorter-term instruments than traditional options, and highly risky. That’s why crypto options traders should hold themselves to the same risk management techniques when trading such weekly options.

0DTE Options in Practice: Trading Short-Term Options

To illustrate the potential of zero days to expiration options, let's consider a hypothetical scenario in which a trader uses these options to capitalize on an upcoming blockchain network upgrade from the Ethereum Foundation. 

For our bull case scenario example, Ethereum once again pulls off a major upgrade that goes off without a hitch, while managing to capture the attention of retail traders who are FOMOing into the market. This will likely cause a short-term rally that drives up ETH prices. 

In this scenario, a crypto options trader can take advantage by purchasing zero-day OTM call options on ETH just before the announcement of the major network upgrade. If the upgrade does indeed go as planned, and the rally does in fact happen, ETH’s price may surge, resulting in significant profits for the trader within a single trading session. This is because the sudden ETH volatility will cause the call option premiums to greatly appreciate as ETH heads toward the strike price of the call options that the crypto trader just purchased.

On the flip side, for our bear case scenario example, if the crypto options trader has a more bearish mentality toward the future catalyst, zero days to expiration OTM put options on ETH can be purchased instead. 

The ideal scenario for this would be if the network upgrade is delayed and pushed back because of fundamental execution errors. This would likely cause fear in the short term as retail traders cast doubt on the Ethereum Foundation’s chances of successfully pulling off network upgrades without causing any disruption to blockchain activities. As a result, ETH prices would plunge, causing the 0DTE puts to suddenly be ITM, as ETH prices approach the strike price of the purchased put contracts.

Tips for Success With Trading Zero Days to Expiration Crypto Options

Success in trading zero days to expiration crypto options requires discipline, quick decision-making and thorough research. Here are some final tips for a better understanding and grasp of this high-risk strategy for trading options.

Develop a Clear Trading Plan and Manage Risk Effectively

 is essential for success when trading 0DTE crypto options. After all, you don’t want to be “bag holding” your options if things don’t play out as planned — since the value of these options can quickly decay if no action is taken. Holding these short-term options can be a real risk if one becomes overwhelmed by the sudden gains and losses incurred. From clear take-profit levels to initiating proper stop losses, a crypto option trader must be aware of these price levels when engaging with 0DTE options.

Know the Underlying of What You’re Trading

 thing you want to do when trading 0DTE crypto options is to fall into the FOMO trap — and simply buy according to what the majority of traders are trading. To succeed in taking advantage of the volatility that comes with upcoming catalysts, 0DTE crypto options traders must be aware of the catalysts for their underlying assets. This can include understanding what network upgrades are coming up for Ethereum, or the potential outcomes of lawsuits and legal battles with regulators for Bitcoin’s potential spot ETF.

Zero days to expiration options offer a unique and exciting opportunity for traders to capitalize on short-term market movements. Their distinct characteristics, such as reduced time decay and capital efficiency, make them a valuable addition to the options market. However, they come with high volatility and limited time for adjustment, making them a challenging instrument to master. As with any crypto trading strategy, 

 and a well-thought-out strategy are essential for success.

For more on crypto options trading, check out our comprehensive guide to mitigating portfolio risks and 

. Additionally, you may choose to read up on 

 and understand what happens when they expire OTM or ITM.

Frequently Asked Questions (FAQs) about Zero Days to Expiration Options

Are zero days to expiration options suitable for crypto beginners?

Due to their high volatility and rapid price movements, zero days to expiration options aren’t recommended for beginners. It's advisable to gain experience with traditional options strategies before attempting to trade 0DTEs.

Can I use zero days to expiration crypto options for long-term investments?

0DTE crypto options are designed for short-term trading and speculation. They aren’t suitable for long-term investment strategies because they expire within the same trading day on which they’re purchased or written.

What’s the minimum capital required to trade zero-day options?

The minimum capital required for zero-day options can vary, depending upon your chosen underlying asset and strike price. It's essential to assess your risk tolerance and consider the possible outcomes before going ahead with your 0DTE options trading plan.

What happens if my zero days to expiration option expires?

If your purchased 0DTE call option expires ITM, you’ll still enjoy a profit, since the underlying asset is bought at your selected strike price and sold to the trader who wrote the options contract at the prevailing last traded price. The reverse is true for 0DTE put options expiring ITM, as you sell to the put writer at a profit.

On the other hand, if your 0DTE call and put options expire OTM, you won’t need to do a thing, since these options simply expire worthless as the funds put toward paying for their premiums decay over time.

What Are 0DTE Options: A Guide to Trading Zero Day Options

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards