Recently, many people are confused by a question: why did the recent market rally first boost altcoins like PEPE instead of Bitcoin? The reason is quite straightforward—liquidity has already been overstretched.

The mid-October correction directly broke through the positions of many market participants, with a large amount of on-market funds being withdrawn. In this situation, it’s difficult to initiate a large-cap asset like Bitcoin. So, the market’s strategy was to first push small coins, using the expectation of new funds entering to replenish liquidity.

The key point to observe here is: a careful comparison reveals that Bitcoin has already fallen below the extreme lows of mid-October, while most altcoins are still above that level. What does this indicate? Altcoins have limited downside space and can only break upward.

PEPE has become the most suitable asset for rotation because of a clear logic: its price has already been cut several times compared to its historical highs, and the early losses have long been cleared out, leaving the market with a very light position. At the same time, among similar assets, its market cap is not the highest, making it relatively easier to push up. More importantly, the imagination space above is huge, making it easier to tell new stories.

What does new capital entering the market need? It needs expectations of doubling or even hundredfold returns; otherwise, it’s simply not attractive. That’s why last year, many newcomers entered the market through certain concept coins.

Based on this logic, the rhythm for the next 1 to 3 months is likely to be that most altcoins take turns performing, with some mainstream tokens possibly reaching new stage highs. In the short term, opportunities in altcoins are worth paying attention to.