Altcoin Rally Drives Crypto Markets as Layer-2 Tokens Outpace Bitcoin

Crypto markets are shifting towards Layer-2 and decentralized finance tokens as they outperform Bitcoin in the latest rally. The DeFi Select Index has risen by 8.3% since midnight and 16% over 24 hours, beating Bitcoin's gain of 2.1% to $78,000.

The rise is also reflected in CoinMarketCap's Altcoin Season Index, which has climbed from 32 to 44, indicating a shift in market leadership beyond isolated gains in individual tokens.

Starknet has surged by 18% on the day and 21% over 24 hours, reaching its highest level since June 19. Arbitrum and Uniswap have also posted significant double-digit percentage gains, with futures open interest nearing a record high for Uniswap.

Weiss Ratings analysts attribute the shift to both tactical and structural reasons, including a short squeeze or rerating of altcoins, which have led since Bitcoin's new low in July. They also argue that Ethereum and Solana are positioned to outperform Bitcoin as the cycle matures.