Ethereum Extends Gains as Capital Rotates from Bitcoin; DeFi, Solana Lead Market Momentum

Ethereum (ETH) continued its weekend rally, climbing past $3,770 as capital rotation out of bitcoin (BTC) fueled renewed interest in major altcoins and DeFi tokens. Despite the surge, ETH still trades nearly 25% below its 2021 all-time high, offering traders a well-defined upside target.

The move extends a trend that has shaped July’s crypto markets: steady, modest gains for BTC, while Layer 1s and DeFi assets deliver breakout performances.

Bitcoin held above $117,400 with a marginal 1% gain over the past 24 hours. Elsewhere, XRP, BNB, DOGE, and Cardano’s ADA posted mixed results as investors locked in profits. In contrast, Solana (SOL) soared 8% to $203 — its highest level since February — driven by ecosystem excitement following the launch of Jito’s Block Assembly Marketplace (BAM).

Meanwhile, DeFi mainstays such as Uniswap and Aave have jumped between 20% and 30% over the past week. Jeff Mei, COO of BTSE, attributed the momentum to robust inflows into crypto ETFs and optimism surrounding the GENIUS Act, which aims to clarify DeFi’s regulatory framework.

“Ethereum is attracting institutional and retail interest in equal measure. Bitcoin remains solid around $117K, but momentum has clearly shifted to ETH,” said Mei. “Given that Ethereum remains well below its previous highs, traders are targeting that gap to close.”

The rotation is also being felt at the fund level, where several institutional investors are increasing exposure to ETH, expecting it to follow bitcoin’s path to new highs. Spot Ethereum ETFs have recorded accelerating inflows, strengthening bullish sentiment.

“We anticipate Ethereum will outperform BTC in the coming weeks as institutions adopt ETH in reserve strategies,” noted Nassar Al Achkar, chief strategy officer at CoinW. “Investors fear missing an ETH rally similar to bitcoin’s run toward $120,000 earlier this year.”

Broader macroeconomic conditions are also playing a role. Long-term bond yields remain elevated globally, and inflation breakeven rates—a measure of market-based inflation expectations—have quietly risen to multi-year highs.

“Markets are pricing in the return of inflation, and financial conditions remain loose,” said Augustine Fan, head of insights at SignalPlus. “Crypto hasn’t missed the memo—there’s a real sense of FOMO in the air, and for now, the good days appear to be back.”