In the cryptocurrency market, there are unique investment strategies and patterns under different market conditions. When the market is persistently fervent, participants tend to focus on Initial DEX Offerings (IDO) projects. In contrast, during times of fear and anxiety, new products often become the focal point. Meanwhile, in a normal market, trading activities dominate.

It is worth noting that the key indicators for the market turning from bearish to bullish are not merely the surface phenomena of increased inflows to exchanges, increased ETF inflows, decreased digital currency on exchanges, or an increase in the number of on-chain wallets holding coins. The real turning point lies in a significant increase in market volatility.

Investors should adjust their strategies based on market volatility: when volatility is low, it may be wiser to accumulate spot assets; while in sufficient volatility, the derivatives market may provide more opportunities. Similarly, market liquidity is also an important factor in determining trading strategies. When liquidity is insufficient, order book trading may have advantages; while when liquidity is abundant, a Decentralized Exchange (DEX) may become a better choice.

Market cyclical changes also affect investment directions. In an upward trend, following capital flows may be a wise choice; while in a downward trend, staying away from areas of capital accumulation may be safer.

The flow of funds within the encryption ecosystem follows certain rules: starting from fiat currency, passing through exchanges, flowing to public chains, and ultimately reaching various ecological projects. Each market cycle typically nurtures 1-2 GameFi projects, 1-2 DePin projects, and 1-2 payment-related innovations.

Understanding these market rules and capital flows helps investors make more informed decisions in the complex and ever-changing cryptocurrency market, seizing potential investment opportunities.