Whether it's Crypto or the traditional financial market, only when money flows in does the market become vibrant. But the cash flow is not fixed in one place, it needs to move continuously, and bring profits to users wherever it goes. Therefore, by tracking and understanding the rules of money flow in Crypto, it will help us know which coin and when to invest in, thereby finding profitable investment opportunities. Quick profit without negative capital.

I Cash flow in crypto
Money flow in crypto is the way smart money moves between Fiat → BTC → Topcap → Midcap → Lowcap.
When analyzing the rules of money flow in crypto, the vast majority of them go through the following stages:

Phase 1: After a large amount of stablecoins are printed, the first cash flow will flow into BTC and pull the whole market up. At that time, the media will report to attract new chickens → More new cash flows will flow in.

Phase 2: After BTC increases strongly to a certain level. At this time, due to investment psychology, the price of BTC is too high, so the cash flow will move to layer 1 topcap coins. Usually, they will be the top coins in the market based on market cap and are famous platform coins such as ETH, BNB, ADA. If money flows in crypto want to enter an ecosystem, it must go through these foundation coins.

Phase 3: Cash flow will gradually move to midcap coins, typically coins from the top 50-100 marketcap or DApps on layer1. Of course, not all coins in this group are increasing, only projects that really have a good foundation or have a lot of positive news coming.

Phase 4: Cash flow begins to flow through Lowcap coins. At this time, a series of junk coins, meme coins x10 x100 times. Many coins that had been on the sidelines for a year suddenly came back to life, pumped very strongly into an extreme fomo market state.

Note :
- Remember that not all layer1 coins will be pumped, only coins with a good foundation and complete ecosystem will have a strong cash flow, and any ecosystem that is incomplete or too small will be blocked. There will be less cash flow and usually the ecosystem that receives the first cash flow is ETH. For example, the FTM ecosystem - complete and complete, will naturally attract more cash flow than EOS, etc.
- Cash flow will move continuously from one ecosystem to another and an ecosystem can receive 2-3 times during a market upcycle depending on many factors.
- Not every coin suddenly increases in price, it needs good news to validate the price line and it also shows up on technical analysis. Good news could be: launching a new application, adding new investors/partners, collaborating with big KOLs,...
- Most of the cash flows from phase 3 and phase 4 are speculative cash flows, signaling the end of an up cycle, so don't hold any coins for long.
- In the final stage, pumping a junk coin x10 x100 is much easier than pumping a top capital coin. So be careful, rapid increase means rapid decrease. Absolutely never go all in on such coins, because if you are not careful, you will swing to the top and certainly will not return to the shore with trash coins like this. A late-stage investment strategy should prioritize keeping money over making money.
- This cash flow rule works most effectively in an uptrend market, so wait until the market recovers before applying it. In addition, don't forget to closely follow the market and understand upcoming trends, technologies, and trends. If the ecosystem solves the problems being encountered, money will flow into it.

II, Cash flow in ecosystems
Money flow in ecosystems is money flowing through Layers, DApp protocols or from within each crypto ecosystem.
Cash flow → Layer 1 (platform coin - people need to buy platform coin for transaction fees)
→ Layer 2 (puzzle pieces are built directly on Layer 1 such as Liquidity, AMM, Lending/Borrowing, Derivatives)
→ Layer 3 (puzzle pieces are also built on Layer 1 using Layer 2 resources, vs. Yield Aggregator, Asset management)

It can be divided into 3 stages as follows

Phase 1: Cash flow begins into the layer1 ecosystem
Surely the money flow will first have to flow through Layer 1, because to participate in an ecosystem, you will need to buy the platform coin of that ecosystem according to Tokenusecage. For example, if you want to participate in the BNB ecosystem, you must have BNB as a gas fee. Thanks to the participation of many users, the value of BNB coin also increases.

Phase 2: Money flows in DApp-Protocol
At this stage, money flows into DApps and Protocols built on that layer1 platform. Therefore, when the platform coin receives cash flow, the AMM - DEX of that ecosystem also increases in price. Next will be the need for Lending and Staking, which are very important financial activities in any market so that cash flow can circulate and create development momentum for the whole economy. In addition, some investors will also participate in the project's IDO rounds, so IDO Platforms were born to address this need.

Phase 3: Cash flow remaining in the ecosystem.
At this time, cash flow will continuously look for investment opportunities at Layer 2 and Layer 3. As long as there is a profitable opportunity, cash flow will be attracted there. Projects at this time will be greatly hyped, and as long as there is some positive news, a lot of money will flow into them.

III, How to know where the crypto money is

a, Cash flow in the crypto market
To know where the money flow is moving and what stage it is in, you can pay attention to the BTC.D index and total market capitalization TOTAL.
For example, BTC.D increases and capitalization increases => money flows into BTC.
BTC.D decreased and capitalization increased => money flowed into Altcoins.
You can read in detail how to analyze Bitcoin Dominance to know whether to trade BTC or Altcoin depending on the time. (BTC.D is the percentage of BTC's capitalization compared to the total market capitalization). Currently, there is no coin with a larger capitalization than BTC and because BTC is the market leader, we will have the following investment strategies according to the BTC.D index:

If BTC.D is in an uptrend and BTC price is in an uptrend, => buy bitcoin.
If BTC.D is in an uptrend and BTC price is in a downtrend => sell altcoins.
If BTC.D is in a downtrend and BTC price is in an uptrend=>buy altcoins.
If BTC.D is in a downtrend and BTC price is in a downtrend => sell Bitcoin.

b, How to identify which ecosystem the money is flowing into.
To know specifically which ecosystem the money is flowing into, look up TVL data. When money flows into an ecosystem, its TVL will increase for a period of time and then the new platform coin will increase accordingly (or sometimes at the same time). You can check TVL – total value lock on DefiLlama.

Note:
- As mentioned above, when cash flow cannot find investment and profitable opportunities, it will exit that ecosystem. At this point, you will see some signs such as:
The TVL of the ecosystem suddenly decreased.
The price of the platform coin suddenly decreased.
AMM - DEX tokens in the ecosystem are also affected and reduced.
Yield Farming has been "crushed", APY - APR interest rates are no longer attractive (slowly decreasing to a few tens of thousands of % to a few tens of %).
The ecosystem lacks ideas, there are no more new games, the products in the system, especially DeFi, are saturated without any new trends in the ecosystem, immediately the cash flow will gradually be withdrawn. .
If you have missed the cash flow in the ETH ecosystem and did not realize it in time, you can have a second chance by referring to DApp, Protocol projects and similar projects in ecosystems such as BNB, SOL , AVAX,...

CONCLUDE
In short, understanding the rules of crypto money flow is critical to success in this highly volatile and rapidly evolving market. When you improve your understanding and analytical ability, your ability to succeed is also increased.