Layer-2 and DeFi tokens lead crypto rally as altcoin index rises

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Layer-2 & DeFi lead rally

Highlights

Layer-2 and DeFi tokens drive Friday’s rally with the DeFi Select Index up 8.3% since midnight and 16% over 24 hours, outpacing Bitcoin’s 2.1% gain to $78,000.
CoinMarketCap’s Altcoin Season Index rises from 32 to 44, reflecting a shift in leadership as Starknet, Arbitrum, Uniswap, Stacks, and Optimism post significant double-digit percentage gains.
Cumulative futures open interest climbs nearly 5% to $141.2 billion, while Bitcoin’s implied volatility holds at 36% and options skews for BTC and ETH turn bullish in the short term.

Altcoin rotation gains momentum

As reported by Weiss Ratings, Friday's rally is led by Layer-2 and DeFi tokens rather than Bitcoin, with the DeFi Select Index rising 8.3% since midnight and 16% over 24 hours.

Starknet climbs 18% on the day and 21% over 24 hours, reaching its highest level since June 19. Arbitrum gains 17% on the day and 25% over the same period, while Uniswap rises between 13% and 25% depending on the measuring window, with futures open interest reaching 86.6 million tokens and nearing a record high. Stacks and Optimism also post gains of 9.2% and 8.9%, respectively.

Bitcoin rises a more modest 2.1% to reclaim $78,000, remaining about 5% below its Sept. 4 high. CoinMarketCap's Altcoin Season Index climbs to 44 out of 100 from Tuesday's low of 32, signaling a measurable change in market leadership beyond isolated gains in a few tokens.

Weiss analysts cited both tactical and structural reasons for the shift. Mark Gough says altcoins have led since Bitcoin made a new low in July, with many alts holding above their June lows despite steeper prior declines, creating conditions for a short squeeze or rerating. Juan Villaverde also argues Ethereum and Solana are positioned to outperform Bitcoin as the cycle matures, with institutions likely to favor established blockchain infrastructure for tokenization and broader crypto adoption.

Macro relief and positioning support risk assets

The latest gains come as the wider market backdrop turns more supportive for risk assets. The 10-year Treasury yield falls back below 5%, while Brent crude slips under $103 after trading as high as $109 earlier in the week, easing inflation concerns that follow Wednesday's Federal Reserve rate hike.

Equity futures firm, while gold and silver also advance, pointing to a broader return in investor appetite. The article also links the crypto move to expectations for more favorable and coordinated regulation from the SEC and CFTC, particularly for DeFi, tokenization, and other infrastructure-related segments.

Derivatives data suggests the rally is drawing more than short-term momentum flows. Cumulative futures open interest expands nearly 5% to $141.2 billion even as daily trading volume dips, a pattern that can indicate capital entering the market on a more structural basis. Bitcoin's implied volatility falls to 36%, a level it has held since May, while options skews on BTC and ETH turn bullish in the short term even as one- and two-month positioning still shows some caution.

We previously covered Weiss Ratings’ view that the VIX has been understating the real level of uncertainty facing investors this year. The report argued that ongoing geopolitical conflicts, higher commodity prices, rising federal debt, and elevated inflation can keep markets volatile even when the headline volatility gauge stays relatively calm.

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