Great find! This scheme is a classic of crypto analysis that helps understand the mechanics of a bull market. Let's break it down from the perspective of an experienced trader.
🔥 The path to Altseason: How does capital rotation work in a bull market?
Friends, I found a great, albeit somewhat simplified, scheme on the internet that perfectly illustrates how money flows from one market segment to another. If you want to not just observe but effectively participate in the rally, this post is for you.
Phase 1: Bitcoin Dominance (Bitcoin Season)
It all starts with Bitcoin. When new capital enters the market (especially after halving or a prolonged correction), novice investors and institutions perceive BTC as the safest and most reliable asset. Money flows into BTC, its dominance increases, and we see parabolic growth. At this stage, some altcoins may rise a bit, but overall they still lag behind.
Phase 2: Ethereum Growth
After Bitcoin has made its main "run," investors start looking for the next opportunity. The gaze naturally falls on Ethereum — the largest platform for smart contracts. Capital begins to flow from BTC to ETH, and Ethereum shows stronger growth. This is the phase when the crypto community starts discussing "flippening" again — the hypothetical moment when the market cap of ETH might surpass that of BTC.
Phase 3: Time for "Blue Chips"
After Ethereum, money flows into large-cap altcoins (LTC, BNB, SOL, ADA, and other market "heavyweights"). These assets, although riskier than BTC and ETH, are still considered quite reliable. They begin to show parabolic growth, and there is a feeling in the market that everything is about to "take off."
Phase 4: ALTSEASON! Euphoria arrives
This is the culmination of the cycle. The amount of money in the market becomes so large that it begins to flood into absolutely all assets, regardless of their fundamentals. The rally encompasses mid, small, and even micro-capitalizations. Memes, shills, one-day projects — everything is shooting to the heavens. It is in this phase that FOMO reaches its peak, and euphoria reigns in the market. It is important to remember that this is also a signal that the market is likely on the verge of a "blow-off top" and subsequent correction.
What follows from this?
This scheme is not just theory but a time-tested model. It shows that a smart investor does not wait for everything to grow but understands where the capital flow is headed and positions themselves in advance.
* At the start: Accumulate BTC.
* After a strong rise in BTC: Rotate part of the profit into ETH.
* When ETH starts to slow down: We shift to large altcoins.
* At the peak of Altseason: We take profits and prepare for the inevitable correction.
Remember: knowing this scheme is your main advantage over the crowd. The ability to secure profits at the peak of euphoria is the key to success!
P.S. Judging by market sentiment and the movement of cryptocurrency, we are currently in Phase 2. #altsesaon #ETH $BTC $ETH
