- Layer 2 and Layer 1 tokens lead October’s crypto recovery, showing stronger investor confidence than other sectors.
- Meme, DeFi, Gaming, and AI tokens stay weak as L2 and L1 assets dominate the market rebound with double-digit gains.
- Market recovery looks healthier with core blockchain tokens driving growth, while speculative coins lose short-term momentum.
The cryptocurrency market has shown renewed strength this October, driven by Layer 2 (L2) and Layer 1 (L1) tokens. According to analyst Daan Crypto Trades, these sectors led the recent market bounce, while other segments, including Meme, DeFi, Gaming, and AI coins, remained largely stagnant.
The observation spans a two-week period from late September through early October, highlighting a selective recovery that suggests healthier market behavior. Daan noted, “If Memes lead every bounce, that usually just leads to disappointment and a failure in continuation of the upside.”The sector performance chart shared by Daan tracks returns across six cryptocurrency segments.
All sectors started around neutral performance levels on September 25th, but the early days saw broad-based weakness. By September 27th, losses ranged between 5% and 7% across all sectors. L2 tokens quickly rebounded from these early declines.
The purple line, which stands for L2, indicates a consistent increase that peaks at about 26% increases by October 7th and then declines a little. L1 tokens took part in the surge as well, albeit with less substantial gains.
DeFi, Meme, Gaming, and AI Performance
DeFi, Meme, L1, and AI sectors exhibited similar patterns through early October. All climbed from September lows into positive territory by October 2nd, fluctuating between 3% and 8% gains over the middle portion of the period. Meme coins showed increasing volatility, hitting near 9% on October 7th, while DeFi temporarily approached 8% returns around October 3rd before settling.
The strength of gaming tokens was moderate in the beginning, rising about 13%, but they quickly reversed and fell closer to 10%. AI tokens struggled to maintain momentum, peaking only near 6% and frequently slipping back toward breakeven.
By October 8th, all sectors experienced a pullback. L2 maintained leadership with gains near 16%, while other sectors clustered between 0% and 5%. Gaming and AI showed the most pronounced declines from their earlier highs, reflecting uneven sector strength.
