The most easily overlooked yet powerful move in the crypto world is style switching. For short-term traders and those rotating between sectors, understanding this tactic is essential.

Simply put, style switching means the market funds suddenly change their preferences. This year, they might be chasing small-cap coins, then turn around to embrace large-cap ones. Sometimes they chase hot concept coins, other times they shift to blue-chip assets. Why such constant switching? Because truly valuable assets are limited, and to make money, funds have to take turns speculating and banding together.

There are significant differences between the Chinese and US crypto markets. In China, style rotation is frequent, with funds repeatedly switching between growth and value styles. Over in the US, it’s much steadier—mainly large-cap stocks have been dominant for the past decade, with a clear Matthew Effect—big coins get bigger, small coins become more marginal.

Once style switching kicks in, the original mainstream assets are collectively dumped. Coins in style A fall together, worsening market sentiment, while style B coins rise on the trend. As prices drop, more people follow suit and sell off, creating a cycle.

This is also why some projects, which are actually fine and have no negative news, suddenly get hammered down—not because the project failed, but because the style is out of favor. Like Lei Jun said, pigs can fly at the right wind, but once the wind is gone, even the best projects will fall. Short-term holdings hit by this move depend on whether you can keep up with the fund’s rhythm.