First, let me clarify my identity; I am a trader who focuses on market structure, adjusting positions based on the performance of different sectors. The views in this article are merely my personal market observations and logical deductions and do not constitute any buy or sell advice. The market is unpredictable; let's cultivate our mindset together.
Recently, does the market make you feel like 'a fist hitting cotton'? Bitcoin is like a Zen Tai Chi master, slowly drawing doors in a range, with both rises and falls lacking explosive power. But if you only focus on BTC, you might miss the truly exciting plot. Market funds are not idle; they are staging a covert battle of 'structural migration'. Today, instead of guessing the highs and lows, let's break down what trading logic is hidden in this differentiated pattern.
1. The current 'twisted' structure of the market: BTC protection, capital seeks other outlets
Bitcoin is repeatedly fluctuating at a key position (such as above $60,000), with both bulls and bears unable to exert full strength. This balance itself is an important signal: large capital is waiting for a clearer macro or event catalyst. However, idle capital is most afraid of sitting still; they must find places that can tell a new story or have potential explosive power.
So you see:
Some capital flows into the 'altcoin seasonal narrative': some tokens with lower market capitalization but strong community or technical updates begin to strengthen independently. This is essentially a tentative increase in risk appetite, with capital seeking higher elasticity while BTC is dormant.
Another part of the capital flows into the 'real revenue and staking' sector: the more uncertain the market, the more attractive assets that can generate stable cash flow become. For example, some decentralized physical infrastructure network (DePIN) projects have tokens that capture expectations of network usage fees; likewise, in the liquid staking derivatives (LSD) track, after the Ethereum upgrade, its 'yield-generating' property has become more certain and important.
2. A specific judgment logic: look at 'relative strength' rather than 'absolute price'
This is one of my most commonly used techniques. Don't ask 'Can this coin be bought?' Instead, ask 'Is it currently stronger or weaker than Bitcoin/Ethereum?'
If the market is sideways or slightly down, but a certain token can continue to strengthen and even break through its key resistance level, this is called 'showing relative strength'. This indicates that capital is actively laying out this token, regardless of the short-term drag of the market. Once this type of coin encounters a market rebound, it often acts as a 'vanguard'.
Conversely, if the market rises but it remains sluggish or even declines, it indicates that capital is flowing out of it, and caution is warranted in the short term.
For example, you can easily switch views onthe trading pair page of BinanceFor instance, don't just look at the price of AXS/USDT, take a look atAXS/BTCthis trading pair. If the curve of the AXS/BTC trading pair is steadily rising, it indicates that AXS is outperforming Bitcoin, and its strength is real.
3. Responding to trading strategies: switch from 'trend following' to 'sector rotation allocation'
In a one-sided bull market, the strategy is 'buy and hold' or 'chase strong trends'. But in the current volatile differentiated market, a more effective strategy may be 'sector rotation allocation'.
My simple method is:
Divide into several core baskets: for example, 'large cap blue chips' (BTC/ETH), 'infrastructure', 'DeFi', 'AI and Depin', 'gaming and social', etc.
Observe capital flow: through the 'rising list' of various sector tokens and changes in trading volume on the Binance app, feel the short-term heat of capital flow. For example, in recent days, if the trading volume of several leading AI sector tokens has significantly increased and the price remains resilient, I will increase my attention to this basket.
Dynamic rebalancing: when a certain basket has increased too much in the short term (for example, far exceeding the increase of BTC), I will consider taking some profits and transferring part of the profit to baskets that have lagged behind recently but whose logic remains unchanged. Essentially, this is about 'selling high and buying low' between different sectors. Although it is not possible to hit the exact timing, it allows you to stay in the market and reduce overall volatility.
The market will not always be differentiated. When Bitcoin ends its consolidation and chooses a direction, this structure will be unified again. But before that, understanding differentiation and utilizing it is a compulsory course for every trader who wants to outperform the market. It requires us to be more diligent and to observe more closely, rather than just waiting for the 'All in' signal.
Finally, leave an open question:
In the current differentiated market, do you prefer to 'stick to the core position of BTC/ETH' or 'allocate a portion of your position to participate in sector rotation'? What have you observed recently as the most 'relative strength' sector or individual case? Let's discuss your practical observations in the comments!
