Crypto Market Analysis for May 2025

1. Macroeconomic Overview

In May 2025, the U.S. economy is at a critical turning point. Inflation continues to decline, the labor market shows resilience, monetary policy enters a wait-and-see period, and trade policies bring new uncertainties. Against this backdrop, the crypto market demonstrates strong resilience, and the global risk asset structure may face a new round of revaluation.

inflation trend

The annual CPI in April dropped to 2.3%, the lowest since February 2021, indicating that price pressures continue to ease. The U.S. Treasury has initiated a $40 billion Treasury bond repurchase operation, seen as a "quasi-QE" measure aimed at releasing liquidity and refinancing at low interest rates, becoming an important force supporting the prices of risk assets.

labor market

In April, non-farm payrolls added 177,000 jobs, far exceeding expectations, reflecting resilience in the job market. This provides the Federal Reserve with a basis to maintain a wait-and-see policy, while also easing market concerns about a recession, but it also diminishes the likelihood of multiple unexpected rate cuts this year.

monetary policy dynamics

The Federal Reserve Chairman stated that the current monetary policy framework will be reassessed, and the "average inflation targeting" mechanism may be abandoned. In the future, there may be an extension of the high interest rate maintenance period, and even the expansion of the balance sheet to increase holdings of medium- and long-term government bonds to control the rise in long-term interest rates. The policy tone will be more flexible, and there is no urgency for preemptive interest rate cuts in the short term.

Trade Policy and Global Economic Outlook

In early May, it was announced that tariffs would be levied on EU goods. Although this was delayed, it has already impacted market sentiment. The Chinese central bank implemented a "reserve requirement ratio cut + interest rate cut" combined policy, releasing 1 trillion yuan in liquidity, which is seen as the start of a new round of easing cycle, and market expectations for improvement in Sino-U.S. relations have heated up.

2. Crypto Market Overview

trading volume analysis

As of May 27, the average daily trading volume in the market was $117.4 billion, an increase of 15.8% compared to the previous period. During the two phases from May 6 to 12 and from May 21 to 22, the trading volume surged significantly, with the daily trading volume once exceeding $180 billion, and BTC prices breaking through $100,000 and $110,000 respectively.

market value change

As of May 27, the total market capitalization of cryptocurrencies has rebounded to $3.56 trillion, up 17.0% from last month. BTC market share is 62.6%, and ETH market share is 9.6%, with the latter increasing by 29.7% compared to the previous period. Since May 8, the total market capitalization has been steadily rising, and the trend of structural market repair is evident.

popular new coins

Among the popular tokens launched in May, VC-backed projects dominate, including Layer 2 projects SOPH and B2. In addition, USD1 serves as a popular narrative in May, with related projects such as B, Lista, and Staketone receiving widespread attention.

3. On-Chain Data Analysis

BTC, ETH ETF capital flow

In May, the net inflow of BTC ETFs was approximately $5.77 billion, while the net inflow of ETH ETFs was approximately $317 million. The price of BTC rose from $94,212 to $108,969, an increase of about 13.5%; ETH rose from $1,794 to $2,635, an increase of 31.9%.

stablecoin market changes

In May, the stablecoin market continued to show strong growth, with a total circulation increase of approximately $7.28 billion, mainly from USDT, USDE, and DAI.

4. Mainstream Currency Price Analysis

BTC price trend

BTC has been striving to maintain above $109,588, rising for seven consecutive weeks. Institutional investors continue to inject capital, with $2.9 billion inflow recorded for BTC ETP last week. The bullish target is to break through $111,980, with potential upside to $130,000. The key support level is the 20-day EMA ($104,886).

ETH price trend

ETH rebounded from the 20-day EMA ($2,425) on May 25, showing strong demand at lower price levels. The bullish target is to break through the $2,738 resistance level, with the potential to rise to $3,000. The support levels below are $2,323 and $2,111.

SOL price trend

Solana found support at the 20-day EMA ($169) on the 20th, with bulls targeting a breakout above the $188 resistance level, potentially rising to $210-$220. The lower support is at the 50-day SMA ($151).

5. Hot Events

USD1 Ecological Development

The market capitalization of the USD1 stablecoin has surpassed $2.1 billion, making it the seventh largest stablecoin. The main narrative revolves around "presidential endorsement + RWA track + expectations for stablecoin legislation." Several USD1 partnership projects have seen significant price increases, boosting the popularity of the "WLFI + USD1" concept.

The rise of the Believe platform

The core token of the Believe platform, Launchcoin, once had a market value close to $310 million. The platform focuses on the concept of "social assetization," but the excessive support for the token $YAPPER and its subsequent crash triggered FUD within the community. The platform has issued over 27,000 tokens, with a total market value of approximately $290 million, but it is highly dependent on the performance of Launchcoin.

6. Future Outlook

Stablecoin Bill Progress

The "GENIUS Act" has entered the revision process and may complete legislation in Q4 2024. The bill addresses aspects such as issuance qualifications, reserve requirements, and compliance obligations, aiming to strengthen the international dominance of dollar-pegged stablecoins.

Ethereum ETF pledge approval

The SEC has postponed the decision on Grayscale's Ethereum Trust ETF to June 1. Hong Kong has approved Ethereum ETF staking, and the US market expects regulators to advance related approvals soon. Once realized, this could drive a new wave of market enthusiasm for Ethereum and related assets such as Lido and Eigen.