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Ethereum layer-2 (L2) tokens outperformed the broader cryptocurrency market following a $19 billion liquidation event triggered by geopolitical volatility, with scaling solutions like Mantle (MNT),
(ARB), and (IMX) leading the rebound. Mantle's MNT token surged 31% on Monday, becoming the third-largest gainer among the top 100 cryptocurrencies, while Arbitrum and Immutable tokens registered double-digit gains. The rally was attributed to growing utility within the Bybit exchange ecosystem and reduced selling pressure from competing layer-2 networks.Mantle's price tripled over three months, driven by strategic partnerships and a $200 million Mantle EcoFund aimed at expanding its ecosystem. Bybit's integration of MNT included staking products with yields up to 90% APR and structured trading tools, fostering a feedback loop between centralized and decentralized finance. Analysts noted that Mantle's active addresses rose 117% week-over-week, the highest growth among L2s, signaling strong on-chain adoption.

The broader market context included a $19 billion liquidation event on October 10–11, 2025, caused by former U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports. The move triggered panic selling, with
dropping 8.4% and falling 14.2%. However, Ethereum L2 tokens showed resilience, with and IMX surging despite the downturn. Jake Kennis of Nansen highlighted Mantle's momentum, citing its utility-driven growth and institutional-grade real-world asset (RWA) infrastructure.Technical analysis reinforced the bullish trend. Arbitrum (ARB) broke above a descending channel, while Optimism (OP) surged 95% from its June low, driven by a falling wedge breakout. Immutable's (IMX) price also rebounded 75% as ETH's rally provided tailwinds. Momentum indicators like the Relative Strength Index (RSI) and Chaikin Money Flow (CMF) suggested sustained buying interest, though short-term corrections remained a risk if ETH's price faltered.
The L2 outperformance contrasted with a 25% decline in ETH reserves on layer-2 networks since March 2025, as investors shifted to the Ethereum mainnet for security and staking opportunities. Despite this, L2s gained traction through innovative use cases. Mantle's RWA platform, launched at Token2049, enabled institutional-grade tokenization of real-world assets, attracting partnerships like World Liberty Financial's $2 billion USD1 stablecoin deployment. Bybit CEO Ben Zhou emphasized Mantle's role as a bridge between traditional and decentralized finance, with RWAs central to its strategy.
Market analysts observed that the crash flushed out excessive leverage, potentially setting the stage for a healthier bull run. While Bitcoin and Ethereum stabilized above key support levels, L2s like Mantle and Arbitrum demonstrated stronger price resilience, driven by utility-driven adoption and strategic integrations. The $19 billion liquidation event underscored crypto's sensitivity to macro shocks but also highlighted L2s' ability to outperform during market resets.
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