Layer 1 cryptocurrencies and DeFi tokens surged this week, while bitcoin and ether remained stable. Bitcoin struggled to stay above $35,000 and mostly traded between $34,000 and $35,000, facing selling pressure. By the week's end, Bitcoin was around $34,400, with a 2% weekly gain, while Ether saw a similar increase.

On the other hand, tokens from Layer 1 networks like Avalanche, Cardano, and Polkadot saw substantial gains of 10%-15%, and Solana reached a 14-month high with a 25% gain over the week.

DeFi tokens had the most significant weekly gains, with the DeFi Index increasing by nearly 10%, driven by tokens from decentralized exchanges and lending platforms.

The CoinDesk Market Index outperformed Bitcoin and Ether, highlighting the strength of alternative cryptocurrencies.

This shift towards smaller tokens suggests a capital rotation from Bitcoin and Ether after their recent rallies, a common pattern in crypto bull markets. It appears that the demand for crypto assets remains strong, driven by spot buying and indicating a sustainable uptrend.