What is capital rotation?
Rotation is the act of shifting funds from one coin to another to optimize profits. It is NOT averaging, but a strategy of redistributing assets when one coin shows weakness and another shows strength.
As an example, I will take BNX and CVX from the list of losing in price/showing growth. The price is relevant at the time of writing.
Rotation from declining BNX (1.12$) to rising CVX (2.838$)
Logic and goal
BNX is falling: downtrend, weak buyer interest.
CVX is rising: there are buyers, trend up.
Goal: to exit a losing asset and earn on a growing one.
Example with calculations
Suppose we have $1,120 in BNX (1000 BNX at 1.12$).
Selling BNX:
1000 BNX 1.12$ = $1,120
We buy CVX:
$1,120 / 2.838$ ≈ 394.5 CVX
CVX rises by +20% (for example, to 3.40$):
394.5 CVX 3.40$ = $1,341
Profit: $221 (+19.7%)
Rotation back: CVX → BNX
When CVX has risen significantly and BNX shows the first signs of reversal (for example, volumes are increasing, it is falling less than the market, and news has appeared), a rotation can be conducted back.
Logic and goal
CVX is overheated (has risen too quickly, a pullback is possible).
BNX has stabilized and shows growth potential.
Goal: to lock in profits in CVX and re-enter BNX at a lower price.
Example with calculations
Suppose after the first rotation we have $1,341 in CVX (394.5 CVX).
Selling CVX at 3.40$:
394.5 3.40$ = $1,341
We buy BNX, which has fallen to 0.85$:
- $1,341 / 0.85$ ≈ 1,577 BNX
BNX rebounds by +30% (to 1.10$):
1,577 BNX 1.10$ = $1,734
Profit: $393 (+35% from the initial $1,120)
Total profit from 2 rotations
First rotation (BNX → CVX): +$221 (+19.7%)
Reverse rotation (CVX → BNX): +$393 (+35%)
Final: $1,734, which is 55% more than the starting capital ($1,120)
Rotation works both ways: first from weak asset to strong, then back after correction.
It is important to look at the trend and strength of the coin, not just the price.
Correct rotations yield +50–100% profit faster than simple averaging!
Rotation can be conducted not only ‘back’ between two coins but also to transfer capital into completely different assets if they appear more promising.
Key points:
Trend and fundamental analysis:
If any asset shows weakness, it can be sold and the money transferred to coins or projects that have clear growth drivers. This can be a large coin or a smaller asset if it shows positive signals.Instead of transferring money back to the original coin, capital can be distributed among several assets. This reduces risks if one coin does not show the expected growth.
Flexibility of strategy:
Rotation is a tool for active portfolio management. If new opportunities arise (for example, fresh news, partnerships, technological updates), capital can be moved to other assets, even if they did not participate in the rotation before.Example:
Suppose you have a declining asset A. You sell it and receive free capital.
Instead of buying asset B, which previously showed growth, you see potential in assets C and D.
You distribute the money by buying part of C and part of D.
If one of these assets starts to grow — take profits or conduct the next rotation.
Rotation can and should be adapted to current market conditions. It is not necessary to return to the original asset or transfer money back; one can look for other promising investment directions that will maximize market opportunities and optimize the portfolio.
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