May 2025 Crypto Market Analysis

1. Overview of the Macroeconomic Environment

In May 2025, the American economy is at a critical turning point. Inflation continues to decline, the labor market shows resilience, monetary policy enters a wait-and-see period, trade policies bring new uncertainties, and the fiscal side affects market expectations through repurchase operations and adjustments to debt ratings. Against this backdrop, the crypto market demonstrates strong resilience, and the structure of global risk assets may undergo a new round of reassessment.

inflation trend

In April, the seasonally adjusted year-on-year CPI fell to 2.3%, the lowest since February 2021, indicating that price pressures continue to ease. The seasonally adjusted month-on-month CPI recorded 0.2%, slightly below expectations, suggesting insufficient momentum for inflation to rebound in the short term. Meanwhile, the U.S. Treasury initiated a $40 billion treasury bond repurchase operation, which is generally seen as a measure to release liquidity in the market, becoming an important force supporting risk asset prices.

labor market

In April 2025, non-farm payrolls added 177,000 jobs, far exceeding the market expectation of 138,000, reflecting the resilience of the job market. This data provides the Federal Reserve with a basis to maintain a wait-and-see approach regarding policy. The continued strength of employment has, on one hand, eased market concerns about a recession, while on the other hand, it has diminished the likelihood of multiple unexpected rate cuts within the year.

monetary policy dynamics

The Federal Reserve Chairman stated that they will reassess the current monetary policy framework and may abandon the "average inflation target" mechanism. He pointed out that frequent supply-side shocks are changing the traditional policy environment, prompting the Fed to pay more attention to structural inflation risks. In the future, the Fed may extend the period of high interest rates and even increase its holdings of medium- to long-term government bonds through balance sheet expansion to control the rise in long-term rates. The policy tone will be more flexible, and there is no urgency for preemptive rate cuts in the short term.

Trade Policy and Global Economic Outlook

At the beginning of May, relevant parties announced a 50% tariff increase on EU goods starting from June 1. Although it was postponed to July 9, the threat of high tariffs has already impacted market sentiment. In light of the frequent changes in trade policies, the uncertainty regarding future policy paths has significantly increased. In the context of Sino-American relations, the People's Bank of China implemented a "reserve requirement ratio cut + interest rate cut" policy in May, releasing 1 trillion yuan in liquidity and lowering the policy interest rate to 1.4%. This move is seen as the start of a new round of easing cycles, with market expectations for improvement in Sino-American relations heating up and risk appetite simultaneously rising.

2. Crypto Market Overview

Trading Volume Analysis

As of May 27, the market's average daily trading volume was $117.4 billion, an increase of 15.8% compared to the previous period, indicating a continued rebound in capital activity. The overall market exhibited characteristics of high volatility, with multiple instances of daily trading volume exceeding a 50% increase. During the two phases from May 6 to May 12 and from May 21 to 22, trading volume surged significantly, with daily trading volume once exceeding $180 billion. During this period, BTC prices broke through $100,000 and $110,000 respectively, and market bullish sentiment significantly intensified.

market value change

As of May 27, the total market capitalization of cryptocurrencies has rebounded to $3.56 trillion, an increase of 17.0% from last month. Among them, the market share of BTC is 62.6%, and the market share of ETH is 9.6%, the latter having increased by 29.7% compared to the previous period, indicating a continued preference for allocation to ETH in this round of funding. Since May 8, the total market capitalization has risen above $3.3 trillion, and has since been steadily increasing, with a clear trend of structural market repair.

popular new coins

Among the popular tokens launched in May, venture capital-backed projects still dominate, including Layer 2 projects SOPH and B2. In addition, USD1, as one of the popular narratives in May, has also gained widespread attention in the market, along with related stablecoins and their associated projects such as B, Lista, and Staketone.

3. On-chain Data Analysis

BTC, ETH ETF fund flows

In May, BTC ETF saw a net inflow of $5.77 billion, and ETH ETF had a net inflow of $317 million. Market sentiment has significantly improved, driving Bitcoin's price to strongly rebound and set a new historical high at $111,959. As of May 28, Bitcoin's price increased from $94,212 to $108,969 within the month, a rise of approximately 13.5%. On the Ethereum side, benefiting from expectations of the Pectra upgrade and a more relaxed macro policy, the price increase is even more significant, rising from $1,794 at the beginning of the month to $2,635, an increase of 31.9%.

stablecoin market changes

In May, the stablecoin market continued its strong growth momentum, with a total circulation increase of approximately $7.28 billion. USDT, USDE, and DAI became the main drivers of growth this month. With the easing of macro policies, the crypto market experienced a significant correction, while the demand for stablecoins continued to rise.

4. Mainstream Currency Price Analysis

BTC trend

Bitcoin is struggling to maintain above $109,588, with buying interest stepping in during each slight pullback. It has risen for seven consecutive weeks, and if it continues into the eighth week, it will pave the way for further gains. Institutional investors are continuously injecting funds, with last week's BTC ETP recording an inflow of $2.9 billion. The bullish target is to break through $111,980, which could drive the price up to $130,000. Support below is around the 20-day moving average at $104,886, and if it fails to hold, it may retrace to $100,000.

ETH trend

Ethereum rebounded from the 20-day moving average of $2,425 on May 25, indicating strong demand at lower levels. Bulls will attempt to break through the resistance level of $2,738 again. If successful, ETH/USDT may test $3,000, potentially encountering resistance around $2,850 along the way. If it falls below the 20-day moving average, it could drop to $2,323, or even $2,111.

( SOL trend

Solana found support at the 20-day moving average )$169###, indicating positive market sentiment. The bullish target is to break through the $188 resistance level, and upon success, it is expected to rise to the $210 to $220 range. If it drops below the 20-day moving average, it may retreat to the 50-day moving average ($151) to seek support. There may be consolidation between $153 and $188.

5. Hot Event Analysis

( USD1 ecological development

As of May 28, the market capitalization of the USD1 stablecoin has surpassed $2.1 billion, making it the seventh largest stablecoin. Its core advantage lies in being issued under the leadership of the Trump family, making it the first stablecoin project to receive endorsement from a former president. Currently, the narrative around USD1 mainly revolves around 'presidential endorsement + RWA track + expectations of stablecoin legislation.' Several USD1 partners, such as Buildon and Lista DAO, have seen significant increases in token prices, fueling the market's enthusiasm for the 'WLFI + USD1' concept. If the US stablecoin legislation is passed, USD1 and its partner projects are expected to play a more important role in the future crypto ecosystem.

![BitMart VIP Insights | May Crypto Market Analysis])https://img-cdn.gateio.im/webp-social/moments-67eaac5d24a4277907535c1269e75f9e.webp###

( The rise of the Believe platform

The core token of the Believe platform, Launchcoin, reached a monthly high of $0.36, with a market cap approaching $310 million at one point. The platform focuses on the concept of "social assetization," allowing users to automatically trigger token issuance by posting on the X platform. The platform's activity level has rapidly increased, with the number of new coins ranking third among MEME platforms. However, the controversy surrounding the official supported $YAPPER token's plummet has led to a decline in platform popularity. By the end of the month, Believe had issued over 27,000 tokens, with a total market cap of approximately $290 million, of which Launchcoin accounted for nearly 63%. The platform faces skepticism regarding the lack of practical application scenarios, leading to uncertainty in its future development.

![BitMart VIP Insights | May Crypto Market Analysis])https://img-cdn.gateio.im/webp-social/moments-a0b4fdb6fdbac4e6b6ca37a1fc8f1385.webp###

6. Future Outlook

( Stablecoin Bill Progress

This month, the "GENIUS Act" was passed with 69 votes in favor and 31 votes against the debate motion, entering the amendment process. The legislation is expected to be completed in Q4 2024. The core content includes issuance qualification restrictions, reserve requirements, compliance obligations, and more. The bill aims to strengthen the international status of US dollar-pegged stablecoins and restrict offshore issuers. With Hong Kong having passed relevant regulations, the United States is likely to accelerate the legislative process. In the future, stablecoin projects with strong compliance are expected to gain greater market recognition.

![BitMart VIP Insights | May Crypto Market Analysis])https://img-cdn.gateio.im/webp-social/moments-6a6780fc7ff4947dbd31cb50b03c3486.webp###

( Ethereum ETF staking approval

The SEC has postponed its decision on products such as Grayscale's Ethereum Trust ETF until June 1, with a final deadline at the end of October. In contrast, Hong Kong has approved the Ethereum ETF staking services of Bosera Asset Management and Huaxia Fund. The market expects that U.S. regulators will soon reach a framework on the relevant mechanisms. Once realized, this will promote the institutionalization process of Ethereum, and staking-related assets such as Lido and Eigen may usher in a new wave of market enthusiasm.

![BitMart VIP Insights | May Crypto Market Analysis])https://img-cdn.gateio.im/webp-social/moments-cb0bece5fd397321ce37ae6b96c60e7a.webp###