CoinMarketLabCrypto does not rise evenly. Capital and attention move between sectors in waves, and each wave gets a name: DeFi summer, NFTs, L2s, memecoins, AI. This is narrative rotation.
A common pattern
- Majors lead: Bitcoin and large caps move first as liquidity returns.
- Infrastructure follows: L1s and L2s see inflows as traders look for higher beta.
- Themes ignite: a story with a catalyst pulls capital into a sector.
- Speculation peaks: small caps and memecoins run hardest near the end.
What to measure
- Relative strength of a sector index against Bitcoin.
- Breadth: how many tokens in the sector are rising, not only the leader.
- Volume and open interest growth.
- Developer and usage metrics that confirm the story.
- Social attention, as a late signal.
The practical edge
Rotations tend to be obvious in hindsight. The edge is in tracking breadth and usage early, sizing small, and exiting when only the smallest tokens are still rising.
Patterns repeat loosely, not exactly. Not financial advice.