When money-market yields fall from 5% to 2.5%, traders flee stablecoins and re-lever DeFi. Aave, Curve, Uniswap rally 30-80% as governance tokens become yield proxies. This happens first.
Capital rotates to riskier narratives: tokenized stocks (Dinari), real estate, enterprise blockchains. Arbitrum, Optimism, Avalanche rally 40-120%. RWA boom narratives take hold. This is the narrative rotation wave.
The peak-risk phase. Emerging L1s, privacy coins, binary-outcome projects rally 200-500%. Bitcoin dominance compresses below 30%. Leverage peaks, FOMO spreads. This wave is where most losses occur.
Wave 1 winners: Aave, Curve, Lido, Uniswap. Wave 2 winners: Arbitrum, Optimism, Avax. Wave 3 winners: Low-cap narratives with binary catalysts. Bitcoin is the base—don't sell all for alts.
Now (Aug 2026): Hold Bitcoin, start DCA into Tier-1 alts. September: Add more as rate cuts solidify. October: Begin taking profits on Wave 1 winners. Prepare dry powder for Wave 2.
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