In this circle, the money made comes from those who did not sell in time; if you can sell at the right moment, that's profit.
#币圈暴富
Generally speaking, the new funds entering the crypto space are like a group of novices chasing trends, first flocking to the most famous Bitcoin, after all, everyone has only heard of 'big pie'. As more and more people buy in, the price and market share of Bitcoin start to rise rapidly. However, this frenzy will not last forever; it's like a bucket of water that will overflow once it's full.
When the price of Bitcoin rises to a certain level, newcomers start to feel that other cryptocurrencies also have opportunities, and funds gradually flow towards second-tier coins like Ethereum (ETH), then spread to niche coins like Solana, BNB, and DOGE. After all, having made money with Bitcoin, they naturally want to try other projects to see if they can make another profit.
So, in the beginning, everyone crowds onto the big ship of Bitcoin, and once the ship is full, some people will jump onto other smaller boats to continue seeking new opportunities. This is the general flow of funds.
Under the circumstance where most of the chips are locked by 'old players', the new incoming funds are like a spark, which can gradually push the market cap of small cryptocurrencies to new heights. For example, while Bitcoin may only rise a little, Ethereum (ETH) could soar by 5 to 8 times, and smaller coins can see even more astonishing gains.
When the market cap of these smaller coins rises rapidly, the market share of Bitcoin will decline. Once it falls below 50%, it becomes dangerous—this is usually a precursor to a crash in small coins. The market is too hot, and after the carnival, a steep drop follows. For example, when Bitcoin drops by about 20%, other smaller coins might directly drop by 70%; that's how it works.
Therefore, understanding the trend of Bitcoin is sufficient, as it often serves as the barometer for the entire market.