Higher tracks always take precedence. Thus the opacity (transparency) of track 2 determines whether track one is visible, and by how much.
Use the TRANSPARENCY effect on the higher track (track 2 in this example) to plot keyframes.
Here's how the effects window might look for a crossfade from track 1 being fully visible to track 2 being fully visible - then back again.
The track two effects window, below, starts at 0 opacity, ramps to 100%, then returns to 0 at the end. So this is one method to crossfade between tracks.
The result.
Transitions were designed for contiguous clips on the same track. Further, clips may not have video available to span the duration of a transition, whether contiguous or on separate tracks.
In your case, if there is content available beyond the boundaries of the desired video, an overlap can be created by extending the FROM clip track at its tail and the TO clip track at its head.
For a one-second transition that overlap should be one-second. Then keyframe TRANSITION effects for each track: ramp down the FROM track and ramp up the TO track simultaneously.
