Whether we are paying attention to macro news or market candlesticks, we are essentially trying to capture the market's emotions and the capital flows represented by those emotions, as capital flow is the true key to determining price movements. Capital will also flow in the direction that produces the most immediate effects, which is why narrative becomes so important. Generally speaking, the market transitions from cold to hot through several stages.

First Stage (Chaotic Period)

Capital lacks a clear main line, generally spreading out widely, even pure meme and narrative-less altcoins (like DOGE and PEPE) can experience a rebound.

The reason is "buy first, ask questions later," regardless of your sector, it's about betting on warming emotions.

Second Stage (Narrative Convergence Period)

Capital begins to concentrate in areas with clear narratives, such as the current ETF concept (BTC, ETH Spot ETF).

Altcoins with ecological value (like UNI and Pengu) are naturally liquid and have user bases because they are affiliated with main chains like ETH and SOL, leading to high activity, large volatility, and quick rebounds.

At the same time, the premium of these "affiliated altcoins" comes from the rise of the chain itself plus the return of ecological funds, providing dual momentum.

Third Stage (Sector Fermentation Period)

Once ETH is confirmed to take the lead, various branches of the ETH ecosystem (DEFI, L2, meme) will take turns in the spotlight.

UNI (the DEX leader), ARB/OP (L2), and ETH-related memes (like the old SHIB and new high-activity memes) will benefit.

The SOL ecosystem may be marginalized unless it achieves an independent narrative breakthrough; otherwise, it could indeed enter a period of stagnation (historically seen, like the noticeable decline in the presence of BNB during the ETH bull market).