May 2025 Crypto Market Analysis

1. Macroeconomic Situation

In May 2025, the US 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 policy brings new uncertainties, and fiscal policy influences market expectations through operations like treasury bond repurchases. Against this backdrop, the crypto market demonstrates strong resilience, and the global risk asset structure may undergo a new round of re-evaluation.

inflation trend

The seasonally unadjusted CPI year-on-year rate fell to 2.3% in April, the lowest since February 2021, indicating that price pressures continue to ease. The seasonally adjusted CPI month-on-month rate recorded 0.2%, showing insufficient momentum for a short-term inflation rebound. Meanwhile, the U.S. Treasury Department initiated a $40 billion Treasury bond repurchase operation, aimed at releasing liquidity through the repurchase of issued Treasury bonds and conducting a new round of refinancing at low interest rates. This operation has become an important force supporting the prices of risk assets.

labor market

In April 2025, non-farm payrolls increased by 177,000, far exceeding market expectations, reflecting the resilience of the job market. This data provides a basis for maintaining a policy wait-and-see approach. The continued strength in employment has, on one hand, alleviated market concerns about a recession, while on the other hand, it has also diminished the likelihood of multiple unexpected rate cuts within the year.

monetary policy dynamics

The Federal Reserve Chairman stated that he will reevaluate 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 a greater focus on structural inflation risks. In the future, it may extend the period of high interest rates and even control long-term interest rate increases by increasing the holdings of medium- and long-term government bonds through balance sheet expansion. The policy tone will be more flexible, and there is no urgency for preventive interest rate cuts in the short term.

Trade Policy and Global Economic Outlook

At the beginning of May, the news of the EU imposing a 50% tariff on goods caused a shock to market sentiment. In China, the central bank implemented a "reserve requirement ratio cut + interest rate cut" combination policy, 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, and market expectations for the improvement of China-US relations have risen, along with a simultaneous increase in risk appetite.

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 rise in capital activity. During the two phases from May 6 to 12 and from May 21 to 22, trading volume surged significantly, with the daily trading volume once breaking $180 billion, and BTC prices exceeding $100,000 and $110,000 respectively, reflecting a notable increase in bullish sentiment in the market.

market cap change

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. Among them, BTC has a market share of 62.6%, and ETH has a market share of 9.6%, with the latter growing by 29.7% compared to the previous period, indicating a continued preference for allocating funds to ETH in this round. Since May 8, the total market capitalization has surpassed $3.3 trillion and has steadily risen since then, showing a clear trend of structural recovery in the market.

Popular New Projects

Among the popular tokens launched in May, VC-backed projects still dominate, including Layer 2 projects like SOPH and B2. In addition, USD1, as one of the popular narratives in May, has seen significant market attention for related projects such as B, Lista, and Staketone.

3. On-chain Data Analysis

BTC, ETH ETF capital flow

In May, BTC ETF net inflows reached $5.77 billion, while ETH ETF net inflows amounted to $317 million. The price of Bitcoin rose from $94,212 at the beginning of the month to $108,969, an increase of approximately 13.5%. The price of Ethereum increased from $1,794 to $2,635, a rise of 31.9%.

stablecoin market changes

In May, the total circulation of stablecoins increased by approximately $7.28 billion, mainly driven by the growth of USDT, USDE, and DAI. The easing of macro policies has led to a significant correction in the crypto market, while the stablecoin market continues to show strong growth momentum.

4. Mainstream Crypto Market Price Analysis

BTC price trend

The price of Bitcoin has broken a historical high of $111,959. Bulls are trying to maintain the price above $109,588, with rising moving averages and an RSI approaching the overbought zone indicating an upward trend. If it breaks $111,980, it could soar to $130,000. The support levels below are at the 20-day EMA($104,886) and $100,000.

ETH price trends

Ethereum rebounded from the 20-day EMA on May 25 at $2,425, showing strong demand at lower price levels. Bulls will attempt to break through the resistance level at $2,738 again. If successful, it could rise to $3,000. The support levels below are at $2,323 and $2,111.

( SOL price trend

Solana is supported at the 20-day EMA)$169###, and bulls will once again attempt to break through the $188 resistance level. If successful, it could rise to $210 or even $220. The lower support level is at the 50-day SMA($151).

5. Hot Events of This Month

( USD1 ecological development

As of May 28, the market capitalization of the USD1 stablecoin has surpassed $2.1 billion, rising to become the seventh largest stablecoin. USD1 is issued by WLFI, led by the Trump family, and is the first stablecoin project backed by a president. The prices of several tokens related to USD1's partners have surged significantly, driving strong market enthusiasm for the "WLFI+USD1" concept.

) The rise of the Believe platform

The core token of the Believe platform, Launchcoin, has surged significantly this month, with its market value approaching $310 million at one point. The platform focuses on the concept of "social assetization" and has rapidly risen through an innovative token issuance mechanism. However, the platform's popularity heavily relies on the performance of Launchcoin, raising community concerns due to a lack of practical application scenarios.

6. Future Outlook

stablecoin bill progress

The "GENIUS Act" has entered the revision process and may complete legislation by Q4 2024. The bill covers various aspects such as issuance eligibility restrictions, reserve requirements, and compliance obligations, aiming to strengthen the international dominance of US dollar-pegged stablecoins. Stablecoin projects with strong compliance are expected to gain greater market recognition.

Ethereum ETF pledge approval

The US SEC has postponed its decision on Ethereum ETF staking, with the final deadline set for the end of October. Hong Kong has approved ETF staking services, and the market expects US regulators to reach a framework on the related mechanisms soon. Once implemented, it could drive a new wave of market enthusiasm for Ethereum and related assets such as Lido and Eigen.

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