Recently, the precious metals sector has been quite active. Silver and palladium have surged particularly aggressively, skyrocketing like rockets and attracting many retail investors to follow suit. However, some voices in the community suggest that the logic behind this rally may not be as simple as it appears on the surface.

Industry insiders analyze that the recent rise in silver and palladium lacks fundamental support and is more of a passive increase driven by short sellers forced to cover their positions. This type of rally is usually difficult to sustain, like a water pipe with a leak, with limited flow. The problem is that once these two commodities can no longer hold up and start to turn down, they may also drag gold down with them. By then, the funds originally in the precious metals market could face a collective exit.

Interestingly, this kind of market rotation often pushes idle funds into other hotspots. The cryptocurrency market, with Bitcoin and Ethereum, could become the next destination for these funds. If large capital indeed flows in, the prices of these two mainstream coins are likely to receive a solid wave of buying support, offering opportunities for participants.

However, it is important to stay alert. Market capital flows are not that fast and do not operate according to a simple timetable. A correction in precious metals does not mean funds will immediately flood into the crypto market. There are often periods of waiting, expectation battles, and multiple trading cycle contests in between. The most common mistake retail investors make is rushing in when they see a smooth logical chain, only to be slapped in the face by the market’s complexity. Capital rotation does exist, but its rhythm and intensity often exceed expectations.