In 2025, the bull market will continue!
About the sector rotation order in the cryptocurrency bull market.
Sector rotation is the flow of funds and hot spots in the cryptocurrency market. Essentially, it is a process where risk appetite gradually increases, and funds spread from the core to the periphery.
Below, we will detail the logic behind this 'wealth flow order':
Platform coins - 'The early duck knows the spring river's warmth.'
Platform coins (such as BNB, OKB, etc.) are the 'stocks' of cryptocurrency exchanges. The most direct sign of a bull market is a surge in trading volume; regardless of which coins rise afterwards, users must trade on the exchange, and the platform profits handsomely through transaction fees.
Logic chain: Market recovery → Active trading → Increased exchange revenue → The value of platform tokens becomes prominent (buybacks, destruction, dividends, new projects require consumption of platform tokens, etc.).
Signal significance: The continuous rise of platform tokens is often a leading indicator of the start of a bull market, meaning the market has basic heat and liquidity.
BTC* (Bitcoin) — 'The leader starts, all coins return to the source'
BTC is the total leader and pricing cornerstone of the entire cryptocurrency market. Its consensus is the strongest, and its capacity for funds is the largest, making it the first choice for whales, institutions, and large funds.
Logic chain: Market heat is confirmed by platform tokens → Large funds and traditional capital begin to flow in → First allocate the safest, most liquid assets → Driving the rise of BTC.
Core role: The rise of BTC provides sufficient funds and confidence for the entire market. Its large market capitalization means that the wealth effect it generates will spill over to other assets. It can be said that BTC determines the height and length of the bull market.
ETH* (Ethereum) — 'Source of the ecosystem, blooming all over'
ETH is the 'operating system' of the cryptocurrency world, with the vast majority of altcoins and applications built on its ecosystem.
Logic chain: The rise of BTC brings a large amount of funds and attention → Investors begin to look for higher-yielding assets → Funds flow into ETH (because it represents the entire ecosystem of DeFi*, NFT*, Web3*) → Driving the rise of ETH.
Connecting the past and the future: The launch of ETH marks the shift of the market narrative from 'value storage' to 'ecological application'. Its strong performance confirms that the bull market has entered the mid-term, and funds begin to flow into more innovative and risky areas.
Altcoin scams* — 'Chaos reigns, everyone shows their skills'
Altcoins with actual projects, a certain level of recognition, relatively high market capitalization rankings, and usually strong control by whales (mainstream coins, blue-chip coins, etc.).
Logic chain: The significant increase in BTC and ETH has established the bullish market tone, leading to an overwhelming wealth effect → Market risk appetite has greatly increased → Funds begin to seek out lower-valued, more attractive 'value niches' → Sector rotation begins (hot concepts are promoted in sequence).
Characteristics: This stage is the main source of Alpha returns and is also the stage where retail investors can most easily 'get rich quickly', but it requires in-depth research into projects and sectors.
Meme coins crazy — 'Apocalypse carnival, retail investors' feast'
Meme coins refer to those with no real value, driven entirely by community culture, celebrity effects, and FOMO emotions (like various dog coins, animal coins, absurd concept coins).
Logic chain: Market sentiment reaches extreme greed and FOMO → New retail investor funds dare not chase mainstream coins that have already risen dozens of times → Shift to trading low-threshold, low-priced meme coins, fantasizing about getting rich overnight, and the carnival reflects madness, forming viral marketing.
Ultimate signal: The frenzied speculation of meme coins is the clearest and most dangerous signal that the bull market is nearing its end. It means that the market's speculative sentiment has completely detached from fundamentals, turning into a pure gambling game. When even the big farmers are recommending it to you, it's time to consider exiting.
It should be noted that:
This is not an exact timetable, but a logical sequence: This sequence will have overlaps and repetitions, but funds generally follow this path.
The dominance of BTC: Throughout the cycle, the trend of BTC remains crucial. If BTC experiences a significant correction, it will wash away almost all the gains of altcoins like receding tides.
Used to judge the cycle position: You can use this model to determine which stage the current market is in, thus adjusting your investment strategy. Should you steadily hold BTC and ETH, actively seek altcoin Alpha, or gradually take profits and exit.
High-risk warning: Especially in the last two stages (altcoin scams and meme coins), while the returns are high, the risks grow exponentially. 'You care about its returns, it cares about your principal.' Participating in these requires being prepared for total loss and strictly controlling your position.
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