Bitcoin plunge sparks altcoin sell-off; ADA jumps

Bitcoin fell about $3,000 to $62,236 on July 31, lowering its market capitalization by roughly $40 billion to about $1.26 trillion. The drop reduced the total crypto market value from $2.33 trillion to $2.22 trillion by Aug. 2 and coincided with a broad altcoin sell-off even as Cardano (ADA) gained 15.3%.

The decline followed several days of gains in late July. Bitcoin was trading above $65,000 at the start of July 31 before the sudden slide. For the month, bitcoin was up roughly 4.5%, while year-to-date losses remained near 30% by Aug. 2.

Most large-cap altcoins fell alongside bitcoin. Ethereum, which neared $2,000 on July 27, closed the week around $1,860, down about 2.6%. XRP dropped close to 2% and Solana fell about 2.7% for the week. The total altcoin market capitalization moved from nearly $1.02 trillion to $964 billion during the same period.

A smaller group of tokens recorded gains. Besides Cardano’s 15.3% rise, UNI climbed 8.6%, PUMP increased about 16%, BEAT rose 7.2% and BNB added 2.4%. Among the larger decliners, HYPE fell 12% and RAIN recorded double-digit losses.

Market participants pointed to several developments that affected sentiment. The Federal Open Market Committee voted to hold interest rates steady the week of the price drop. Political and security events included reports of Saudi strikes in Yemen and drone attacks that affected Egyptian infrastructure. Security incidents involving hardware wallets were also cited as raising custody concerns.

Legislative uncertainty was also noted. Industry observers said passage of the CLARITY Act before the U.S. Senate recess could act as a catalyst for the market, but senators had not reached a consensus on the bill. Over the week ending Aug. 2, bitcoin fell about 2.5%, contributing to the market’s overall decline from its July 27 peak near $2.33 trillion to roughly $2.22 trillion.