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Sector rotation (narratives): definition
Sector rotation is capital moving from one crypto sector to another: AI, Meme, DeFi, Layer 1, RWA…
Definition
The crypto market moves by narratives: a theme (artificial intelligence, memecoins, tokenized real-world assets…) attracts attention and capital, then money moves to the next one. Tracking each sector's performance shows where capital is going.
How to use it
- Compare sectors over several timeframes (1h, 24h, 3 days) to tell a passing spike from a real trend.
- Spot each sector's leading tokens, which rise first.
- Be wary of a sector that has already multiplied its performance: entering late is the classic trap.
Frequently asked questions
How long does a narrative last?
From a few days to several months. The strongest rest on real adoption; the shortest on hype.