May Crypto Market Analysis

1. Macroscopic Perspective

In May 2025, the U.S. macroeconomy 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 operations similar to quantitative easing and adjustments in debt ratings. Against this backdrop, the crypto market demonstrates strong resilience, and the structure of global risk assets may undergo a new round of revaluation.

inflation trend

In April, the year-on-year CPI fell to 2.3% after seasonal adjustment, lower than the market expectation of 2.4%, reaching a new low since February 2021, indicating that price pressures are continuing to ease. The month-on-month CPI after seasonal adjustment recorded 0.2%, also slightly below expectations, showing insufficient momentum for a short-term inflation rebound. At the same time, the U.S. Treasury launched a $40 billion Treasury bond buyback operation, which the market generally views as a measure similar to quantitative easing, aimed at releasing liquidity through the repurchase of issued Treasury bonds and refinancing at low interest rates. This operation has become an important force supporting the prices of risk assets.

labor market

In April 2025, the non-farm payroll added 177,000 jobs, far exceeding the market expectation of 138,000, reflecting the resilience of the job market. This data provides a basis for the Federal Reserve to maintain a wait-and-see approach to policy. The Federal Reserve closely monitors employment data as a basis for policy adjustments. Continued strength in employment alleviates concerns about a recession on one hand, while also diminishing the likelihood of multiple unexpected interest rate cuts within the year.

monetary policy dynamics

The Federal Reserve Chairman stated that the current monetary policy framework will be reassessed, and the "average inflation target" mechanism may be abandoned. He pointed out that frequent supply-side shocks (such as tariffs, geopolitical issues, and energy transitions) are changing the traditional policy environment, prompting the Fed to focus more on structural inflation risks. In the future, the Fed may extend the period of high interest rates, and even increase its holdings of medium- and long-term government bonds through balance sheet expansion to control the rise in long-term interest rates. The policy tone will be more flexible, with no urgency for preemptive rate cuts in the short term, emphasizing that the direction of the June policy will be determined based on data such as PCE, CPI, and tariff impacts.

Trade Policy and Global Economic Outlook

In early May, Trump announced a 50% tariff on EU goods starting June 1. Although it was later postponed to July 9, the threat of high tariffs has impacted market sentiment. Given the frequent fluctuations in trade policy under the Trump administration, market uncertainty regarding future policy directions has significantly increased. On the China-U.S. front, the People's Bank of China implemented a "reserve requirement ratio cut + interest rate reduction" 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 cycle, leading to an increase in expectations for improved China-U.S. relations and a corresponding rise in risk appetite.

Summary

In May 2025, the US economy enters a critical turning point:

• Inflation continues to decline, and expectations for easing are rising;
• Strong employment supports a cautious monetary policy outlook;
• Fiscal policy is similar to quantitative easing operations, combined with the Federal Reserve's shift to a more dovish tone, collectively lowering market interest rates;
• Global trade frictions have resurged, but the repair of Sino-U.S. relations has increased market risk appetite;

In the crypto market, with marginal improvements in the macro liquidity and continuous inflows into ETFs, the price of Bitcoin has broken its historical high to $111,959. The resonance of current macro policies and global financial trends may be helping the crypto market to initiate a new cycle based on structural capital repricing.

2. Crypto Market Overview

Coin Data Analysis

Trading Volume and Daily Growth Rate

According to data platform statistics, 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 continuous recovery in capital activity. The overall market has shown high volatility characteristics, with several instances of daily trading volumes increasing by over 50%. During the two phases from May 6 to May 12 and from May 21 to 22, trading volumes surged significantly, with daily trading volumes once exceeding $180 billion. During this period, BTC prices broke through $100,000 and $110,000 respectively, significantly increasing market bullish sentiment and resulting in a concentrated release of trading momentum in the short term.

Total market capitalization and daily growth

According to data platform statistics, as of May 27, the total market capitalization of cryptocurrencies has rebounded to $3.56 trillion, an increase of 17.0% compared to last month, significantly boosting the total market value. Among them, BTC's market share is 62.6% and ETH's market share is 9.6%, with the latter increasing by 29.7% compared to the previous period, showing a continued preference for allocating funds to ETH in this round. Since May 8, the total market capitalization has risen above $3.3 trillion, and has steadily increased since then, indicating a clear trend of structural market recovery.

New Popular Tokens Launched in May

Among the popular tokens launched in May, projects with venture capital backgrounds still dominate, including Layer 2 projects SOPH and B2. Additionally, USD1, as one of the popular narratives in May, and its associated projects such as B, Lista, and Staketone have also gained widespread attention in the market.

3. On-chain Data Analysis

Analysis of the inflow and outflow situation of ### BTC and ETH ETFs

In May, BTC ETF inflows reached $5.77 billion.

In May, as the United States reached a phased suspension agreement on tariff policies with several countries, market sentiment significantly improved, driving Bitcoin prices to rebound strongly and reach a historic high of $111,959. As of May 28, Bitcoin's price rose from $94,212 to $108,969 within the month, an increase of approximately 13.5%. Meanwhile, Bitcoin spot ETF funds showed a net inflow trend overall, with about $5.77 billion accumulated inflows in May.

In May, ETH ETF inflows reached 317 million USD.

On the Ethereum front, benefiting from expectations of the Pectra upgrade and a easing of macro policies, the price increase has been more significant. As of May 28, ETH rose from $1,794 at the beginning of the month to $2,635, an increase of 31.9%. Ethereum spot ETFs have also attracted capital inflows, with a net inflow of approximately $317 million in May.

Analysis of Stablecoin Inflows and Outflows ###

In May, stablecoin inflows amounted to approximately $7.28 billion, primarily coming from USDT and USDC.

In May, with the United States suspending its tariff policy, the easing of macro policies led to a significant correction in the crypto market. The stablecoin market continued to show strong growth momentum. Among them, USDT, USDE, and DAI became the main drivers of growth this month, with the total circulation of stablecoins increasing by approximately $7.28 billion.

4. Price Analysis of Major Currencies

BTC price change analysis

Bitcoin is struggling to maintain above $109,588, indicating that every small pullback sees buying interest. Bitcoin has risen for seven consecutive weeks, and if buyers can extend this trend into the eighth week, it will pave the way for further gains. Institutional investors are seeing long-term opportunities and continue to inject funds into Bitcoin exchange-traded products. Data shows that Bitcoin ETP recorded $2.9 billion in inflows last week, accounting for a quarter of the total inflows for 2024.

Bitcoin bulls are working hard to push and maintain the price above $109,588, indicating that each pullback is being bought. The rising moving averages and the RSI nearing the overbought zone suggest that the path of least resistance is upward. If buyers can push the price up to $111,980, the BTC/USDT trading pair could soar to $130,000.

On the downside, the 20-day EMA ($104,886) is a key support level to watch. If the price breaks below and closes under the 20-day EMA, it may entice short-term investors to take profits, potentially leading the price to drop to the psychological level of $100,000, where buying interest is expected to form strong support.

ETH price change analysis

Ethereum rebounded from the 20-day EMA ($2,425) on May 25, indicating strong demand at lower price levels. Bulls will again try to break through the resistance at $2,738. If successful, the ETH/USDT trading pair could surge to $3,000, although bears may attempt to halt the rise around $2,850.

If the price retraces from the current level or encounters resistance and breaks below the 20-day EMA, it indicates that the bulls' control is weakening. In this case, the price may drop to $2,323 and then further down to $2,111.

SOL price change analysis

Solana found support at the 20-day EMA ($169) on May 25, indicating that market sentiment remains positive, with traders buying on slight pullbacks. Bulls will attempt to break through the resistance level at $188 again. If successful, the SOL/USDT trading pair could soar to $210 and possibly reach $220.

However, sellers need to push the price below the 20-day EMA to prevent further increases. Once the price breaks below this support level, it may drop to the 50-day SMA ($151), which could serve as strong support. If it rebounds from the 50-day SMA, it may result in the price consolidating in a range between $153 and $188 for a period of time.

5. Hot Events of the Month

USD1 ecology

In mid-May, as the price of BTC broke historical highs and the launch of USD1 on a trading platform caused its popularity to soar, the USD1 ecosystem cooperation projects also gained market attention. As of May 28, 2025, the market capitalization of the USD1 stablecoin has surpassed $2.1 billion, making it the seventh largest stablecoin. Although there are no significant differences in the mechanism design of USD1 compared to other mainstream stablecoins, its core advantage lies in being issued by WLFI, led by the Trump family, making it the first stablecoin project endorsed by a president.

The current narrative around USD1 mainly revolves around "presidential endorsement + RWA track + expectations of the stablecoin bill." WLFI officially positions USD1 primarily for institutional users, while for retail investors, participating in USD1 ecosystem projects presents a better opportunity for benefits. Recently, the prices of several USD1 partner tokens, such as Buildon, Lista DAO, StakeStone, Haedal, and Cookie, have surged significantly, driving the market's high enthusiasm for the "WLFI+USD1" concept. If the U.S. stablecoin bill is successfully passed in the future, USD1, as a stablecoin project personally endorsed by the president, along with its deeply cooperative projects, is expected to play a more important role in the future crypto ecosystem.

Believe has risen to become a new force in the MEME platform.

As of May 28, the core token Launchcoin of the Believe platform has risen from $0.014 at the beginning of the month to a peak of $0.36, with a market capitalization nearing $310 million at one point, making it one of the largest MEME coins in terms of growth recently. The platform was created by Ben Pasternak and focuses on the concept of "social assetization". Users only need to post tweets on social platforms containing $TICKER and @launchcoin to automatically trigger the token issuance.

With the innovative token issuance mechanism and the surge of Launchcoin, the activity level of the Believe platform has rapidly increased, with tokens like Dupe and Goonc following suit. The number of new tokens issued by the platform has jumped to third place on the MEME platform. However, the official over-support of the token $YAPPER led to a crash of over 66% upon its launch, triggering community FUD and a subsequent drop in ecosystem enthusiasm. As of May 28, Believe has issued over 27,000 tokens, with a total market cap of approximately $290 million, of which Launchcoin contributed nearly 63%, and its trading volume accounted for nearly 72% of the ecosystem total. It can be seen that the popularity of the platform token heavily relies on the market performance of LAUNCHCOIN. However, this platform token has been criticized for lacking dividends and actual application scenarios, leading to significant doubts in the community regarding its long-term sustainability.