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

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Trading

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Can you trade with ChatGPT? We dive right the strategies and find out if it's worth trading with an AI bot. 

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Trading is a dynamic and complex activity that requires skill, knowledge and experience. With the rise of the internet and sophisticated technology, trading has become extremely competitive. Many traders rely on algorithmic trading and 

 to improve performance and gain an edge. These systems use mathematical rules, data analysis and machine learning to generate and execute trading signals. They help traders reduce errors, save time, optimize profits and diversify portfolios. 

Unique selling points of AI trading include faster and more accurate data processing, quick adaptation to market changes and the ability to learn from mistakes. However, not all AI trading systems are equally reliable and profitable. One of the newest and most innovative AI systems is ChatGPT, a 

 (NLP) model that generates trading strategies based on conversation prompts. But how trustworthy is a ChatGPT trading strategy? 

This guide will answer this question and help you decide if trading with ChatGPT is right for you.

AI trading is a form of automated trading that uses 

 (AI) to analyze data, generate trading signals and execute trades. AI trading systems can make trading decisions at a speed and frequency beyond human capabilities. By processing vast amounts of data, AI identifies and executes trades efficiently and without the emotional biases that often affect human trading.

 is a type of AI trading that may use predefined mathematical rules and formulas based on factors such as technical indicators, price patterns and market trends. It’s also referred to as rule-based or black-box trading. 

, which incorporates self-learning algorithms that can analyze data, identify patterns and make predictions without explicit programming. This type of trading is also known as data-driven or white-box trading.

A ChatGPT trading strategy is an automated trading strategy generated with the help of ChatGPT. While ChatGPT cannot execute trades on its own, it can generate ideas, analyze and 

 data and help you tweak trading strategies.

ChatGPT is an AI chatbot that uses NLP to create responses to conversational prompts. It was created by 

, an organization focused on researching and developing artificial intelligence. Initially built on ChatGPT-3, the model has now progressed to ChatGPT-4, considered one of the most advanced NLP models available. ChatGPT-4 access requires a ChatGPT Plus subscription.

This versatile tool can generate stories and create code. Developing trading strategies is a particularly intriguing application of ChatGPT. By considering a trader's goals, preferences and risk tolerance, as well as market conditions, ChatGPT can generate customized strategies.

ChatGPT is not an execution platform or broker, and cannot submit live trades. Although ChatGPT can’t trade on your behalf, it can provide guidance on how to trade and improve your decision-making skills. It’s not a complete AI trading bot that can automatically execute trades through your broker account. Instead, it functions as a virtual assistant that suggests trading ideas based on your input.

To use ChatGPT for trading, you’ll also need other tools to implement the trading strategies it generates. These tools include access to a trading platform, such as Bybit. You’ll also need a data provider that gives historical and real-time market data. You can use 

 or online databases to obtain the necessary data.

You’ll also need a code interpreter that enables you to run the code generated by ChatGPT. Online tools like 

 can be used to run the code in your browser, 

 can be used as backtesting tools to evaluate the performance of the trading strategies suggested by ChatGPT using historical data.

Lastly, you can use risk management tools such as 

 to track your performance and manage your risk by controlling exposure and protecting your capital.

Although often used interchangeably, AI trading and algorithmic trading aren’t the same. Algorithmic trading usually involves using predefined mathematical rules and formulas to generate and execute trading signals, while AI trading is a broader term that also encompasses machine learning, a form of artificial intelligence (AI) that adapts systems to analyze data, detect patterns and make predictions without the need for explicit programming. 

The main difference between AI trading and algorithmic trading is that AI trading can learn from data and improve over time, while algorithmic trading follows fixed rules unless it’s manually updated. Additionally, AI trading can handle more complex and dynamic situations, such as changing market conditions and unforeseen events.

However, AI trading may be more challenging to understand, explain and trust than algorithmic trading. It can also be more prone to errors, biases and 

, and requires more data, computing power and maintenance.

How to Use ChatGPT to Create a Crypto Day Trading Strategy

Generating a crypto day-trading strategy involves gathering data, analyzing it, formulating your strategy and backtesting before trading live. You can use ChatGPT to help create a momentum trading strategy. 

To come up with the strategy, try the following prompts.

Ask ChatGPT to generate a list of successful momentum day trading strategies. The provided list includes indicators that may be used to generate a momentum strategy, including 

After gathering price data,you’ll upload it to the code interpreter on ChatGPT-4. You can then ask ChatGPT to create a momentum day-trading crypto strategy, based on the 

 of 1:3, where the final returns are at least 20%. Then, you can provide a sample strategy or try to iterate with the AI to determine a new strategy. ChatGPT will automatically backtest the strategy and provide results.

 is a pillar of any trading strategy. ChatGPT can suggest 

ChatGPT can also produce code to help implement the trading strategy on your preferred platform. However, it may not include all the code required for an automated trading bot, like error handling and order tracking. You’ll have to test and adjust the code before using it in a live trading environment. 

. You can ask for more help to improve the trading strategy and repeat the previous steps.

The effectiveness of a ChatGPT trading strategy depends on various factors, including the quality and quantity of data used for its training, as well as the clarity and specificity of the prompts used to communicate with it. Additional crucial factors to consider are the validity and robustness of the code generated by ChatGPT, and the performance and consistency of the trading strategy it generates. 

As a result, it’s difficult to definitively determine whether a ChatGPT trading strategy is reliable or not. Its effectiveness may vary depending on market conditions, trading plans and strategies, the cryptocurrency being traded and other factors. 

To assess the reliability of a ChatGPT trading strategy, it’s best to thoroughly test it with historical and real-time data using various tools and platforms. Furthermore, it’s always important to 

 and analysis before investing in any trading strategy, whether it’s generated by ChatGPT or not.

Exploring AI trading and generating trading strategies with ChatGPT can be an exciting and enjoyable experience. However, it's essential to remember that potential risks and challenges are involved. To use ChatGPT's suggestions and code effectively, you'll need access to various tools and platforms. You should also have some basic understanding of programming, data analysis, technical indicators and trading concepts.

It's important to recognize that ChatGPT's suggestions and code do have uncertainties and limitations. While helpful, they may not always be accurate, reliable or profitable. Ultimately, you are responsible for your own trading decisions and actions. ChatGPT cannot be held liable for any losses or damages resulting from using its suggestions or code.

Whether or not you decide to trade with ChatGPT depends upon market conditions and upon you. Consider your skills, knowledge, experience and resources before making a decision. When used wisely and cautiously, ChatGPT-assisted trading can be a rewarding experience. However, if used mindlessly or recklessly, it can also be a risky endeavor.

ChatGPT is a helpful tool that uses natural language processing to generate customized trading strategies based upon your own preferences, goals and risk tolerance, and upon current market conditions. It provides ready-made code that you can use with different platforms and tools, saving you time and effort. Furthermore, ChatGPT can inspire creativity by presenting various possibilities and scenarios for your consideration.

However, ChatGPT isn’t a magical solution that can guarantee you trading success, and it’s not a fully automated AI trading bot that can trade on your behalf. Instead, it acts as a virtual assistant, offering suggestions and code for you to implement and test independently. ChatGPT may not always generate profitable or reliable strategies, understand your prompts or respond to your queries in the best way possible. Therefore, make sure to use caution and discretion if you decide to use ChatGPT for trading. 

 This content is purely for educational purposes only. This is not an endorsement of Bybit products or services. The strategies discussed in this article are not intended to be financial advise. Users should consult professional financial advisors before making any financial decisions. 

How Reliable Is a ChatGPT Trading Strategy?

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