😎 The analyst explained the mechanism of liquidity movement in the market cycle.

User X presented a detailed analogy of how liquidity moves through the market, creating different narratives at various stages of the cycle.

Key points:

· Capital movement logic: Investors are constantly seeking "maximum return with minimal risk." When growth potential at one market level is exhausted (like now in gold and silver), capital is forced to move further along the risk curve to maintain returns.
· Cycle phases and capital goals:
· Early cycle: Safety (gold, silver).
· Mid-cycle: Efficiency (bitcoin, major altcoins).
· Late cycle: Speculation (medium and small altcoins, memes).
· The "overflowing vessels" effect: Liquidity (water) flows from large "vessels" (liquid assets with high capitalization) into smaller (less liquid assets). To overflow a small vessel, less water is needed, so even a modest inflow causes explosive growth.
· Narratives are secondary: Stories (narratives) are formed after liquidity movement to explain the already occurred growth. It is the same capital flowing and creating new "plots."

Conclusion: The market is currently at the early stages of this cycle, when liquidity is just beginning to flow from traditional safe assets into cryptocurrencies. According to this logic, the largest movements occur at the end of the cycle, when capital reaches the most speculative and illiquid assets.