After the surge of Solana, where is the next sector rotation opportunity?

Exploring the Next Sector Rotation Opportunity Following the Successful Rise of Solana

Author: Subhashish C.

Translation: Mary Liu from LianGuaiBitpushNews

This article will explore an in-depth analysis of the recent rebound of Solana and the potential “wealth code” for the next one.

Note: This article does not discuss buying Solana or which tokens in the Solana ecosystem, as the market is already highly saturated, but it will introduce the potential rotation of sectors in the next market cycle.

• Exclusive Interview with Base After creating the popular app friend.tech, what other areas will be targeted in the future?
• IRS’s Unconstitutional Broker Rule: A Crypto Catastrophe
• Is the IRS Crushing DeFi? A Taxing Proposal

This involves understanding where the current speculators in Solana are making profits, especially the early ecosystem speculators, and where they might turn next.

I believe this is a more attractive and critical play, so this is the focus. All the content presented in this article is for short to medium-term volatility opportunities. If you are concerned about FOMO and plan to hold any position due to the current price surge, then this article will be particularly meaningful.

First and foremost, regardless of short-term volatility, I still have a positive long-term view on Solana (SOL).

Solana’s Surge

First, let’s discuss the current situation of Solana. It seems like a good time to take profits. Even in a 4-hour timeframe, the chart shows a gain of about 12%. If this momentum continues, we may see a daily surge of up to 50%, which is unsustainable.

If I still hold Solana at this point, I would definitely take profits and wait for a pullback before buying again. The risk-reward ratio seems less favorable now.

Solana’s Status: Is It Time to Invest?

Do you have FOMO?

While Solana has been performing well, it is worth noting that I won’t tolerate blindly betting on it in the short term, especially compared to other opportunities. Similar to Chainlink’s recent surge to $15, I didn’t find it particularly attractive due to its aggressive growth.

Since November 1st, Solana has been consolidating, and I am closely watching if it will break out. When it surged on November 7th, I took profits at around $50, considering it as a good enough profit.

What’s happening in the Solana ecosystem?

Many people on Twitter are talking about significant profits in the Solana ecosystem.

We will verify this by looking at various projects within the Solana ecosystem on CoinGecko. Most of the values have increased significantly, and this excitement is driving liquidity within the ecosystem.

SOL ecosystem has made progress in the past 7 days

The growth of the Solana ecosystem is not limited to major tokens, but also includes altcoins like Bonk and Radium, which have achieved significant gains. I have increased my positions in these altcoins this month and in the last month, and those who buy in quickly will make handsome profits in a short amount of time.

So, should you buy now? The answer is no. Solana and ecosystem tokens are due for a correction, and it’s better to consider buying after that. Currently, it is driven more by speculative trading rather than long-term growth potential.

This pattern aligns with past market behavior, indicating that the focus on the Solana ecosystem will soon shift.

Where is the hot money flowing next?

In this stage of the bull market, fund rotation between different ecosystems is a common occurrence. In the past, we witnessed similar rotations between Solana, Luna, and Avalanche (AVAX) during the peak of the bull market in late 2021 and before.

This happens because the crypto market is driven by emotions and traders and profit-seekers looking for opportunities on-chain. When an ecosystem becomes overbought, traders move on to the next one.

Currently, Solana is the focus in the market. However, I believe it’s time to focus on the next potential hot spot.

These shifts can happen quickly, so staying ahead is crucial.

Therefore, liquidity will flow into the Polygon, Avalanche, and Arbitrum ecosystems.

I entered into Avalanche trading at around $14.50 with a stop loss at $12, and a minimum profit target of $20. Avalanche and Solana are both considered Ethereum killers, and historically, funds flow between these ecosystems during bull markets.

Aside from Avalanche, I am also closely watching the Arbitrum ecosystem. Arbitrum is an L2 solution for Ethereum and has an incentive program that attracts volatile traders. I also made trades on Arbitrum because I believe it has significant growth potential next week.

Focus on top projects in these ecosystems to maximize investment opportunities.

For example: AVAX and Arbitrum (possibly also MATIC) as well as the tokens specifically running on these networks will be the emerging focus of this week and next week.

If we want to delve deeper into these ecosystems, we can look at specific altcoins within them. In the Avalanche ecosystem, I’m particularly bullish on GMX, Radiant Capital, Benqi Protocol, Trader Joe, and Camelot.

These projects are either decentralized exchanges or lending platforms built specifically for the Avalanche and Arbitrum ecosystems. As liquidity flows into the ecosystem, they have the potential to perform well. Arbitrum is attractive because it’s popular among DeFi traders and incentivizes higher yields.

AVAX tokens ranked by TVL from highest to lowest

Despite the overall growth of AVAX, the value of these specific platforms is still underestimated, so there is a possibility of substantial returns.

Similarly, in the Arbitrum ecosystem, platforms related to Ethereum such as GMX and Radiant Capital are also poised for a breakthrough.

Polygon?

In addition to AVAX and Arbitrum, Polygon (MATIC) has also become a competitor, especially as it is about to upgrade to Polygon 2.0 and rename its MATIC token to POL. Polygon has undergone a token upgrade, becoming the Polygon (Pol) token with a new tokenomics. Although Polygon’s ecosystem is not primarily focused on DeFi, the rebranding and token upgrade will attract attention.

It’s important to keep up with the pace as ecosystem sector rotations only happen a few times. Typically, by the third rotation, the trend completely disappears.

This is because people are still very enthusiastic about the Solana ecosystem and are willing to invest in Solana altcoins. When these people turn to AVAX, they have already witnessed the rise and fall of the Solana ecosystem, so they want to speed up the rotation. They invest in top AVAX altcoins, and once they see profits, they are likely to swiftly exit and move on to the next chain, whether it’s Arbitrum or Polygon.

As people become more accustomed to this trading style, the process will become faster. That’s why I don’t recommend entering ecosystems with very small market presence.

In a sector rotation, being one step ahead is crucial for maximizing opportunities and profits.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!