Crypto liquidity follows a predictable rotation pattern:
$BTC pumps first → Capital flows into onchain memes → Traders open perps on legacy tokens (L1s/L2s) → Money rotates into utility/DeFi protocols → Back to onchain memes
This cycle repeats until $BTC hits local top. Understanding this flow helps time entries across different sectors. When $BTC consolidates, altcoin sectors rotate in sequence rather than pumping simultaneously.
$BTC pumps first → Capital flows into onchain memes → Traders open perps on legacy tokens (L1s/L2s) → Money rotates into utility/DeFi protocols → Back to onchain memes
This cycle repeats until $BTC hits local top. Understanding this flow helps time entries across different sectors. When $BTC consolidates, altcoin sectors rotate in sequence rather than pumping simultaneously.