May 2025 Crypto Market Analysis

1. Macroscopic Perspective

In May 2025, the U.S. economy is at a critical turning point. Inflation continues to decline, the labor market remains resilient, monetary policy enters a wait-and-see period, and trade policies introduce new uncertainties, while fiscal measures influence market expectations through special operations. 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

The year-on-year CPI in April, adjusted for seasonal factors, fell to 2.3%, the lowest since February 2021, indicating a continued easing of price pressures. The month-on-month CPI, after seasonal adjustment, recorded 0.2%, showing insufficient momentum for short-term inflation rebound. Meanwhile, the U.S. Treasury Department has initiated a $40 billion Treasury bond repurchase operation, seen as a measure to release liquidity and facilitate low-interest refinancing, becoming 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 and reflecting the resilience of the labor market. This provides a basis for the Federal Reserve to maintain a wait-and-see approach to policy. The continued strength in employment not only alleviates market concerns about recession but also diminishes the likelihood of multiple unexpected rate cuts within the year.

monetary policy dynamics

The Chairman of the Federal Reserve stated that he would reassess the current monetary policy framework and may abandon the "average inflation targeting" 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 Federal Reserve may extend the period of high interest rates and even control the upward movement of long-term rates through special operations. 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

In early May, the United States announced plans to impose tariffs on EU goods, which, although postponed, has already impacted market sentiment. Given the frequent changes in trade policies previously, the market's uncertainty regarding future policy directions has significantly increased. In China, the central bank implemented a "reserve requirement cut + interest rate cut" policy combination, releasing a large amount of liquidity and lowering the policy interest rate. This move is seen as the start of a new round of easing cycle, with market expectations for the improvement of Sino-U.S. relations heating up, and risk appetite rising accordingly.

Summary

In May 2025, the U.S. economy enters a critical turning point:

• Inflation continues to decline, easing expectations are rising.
• Strong employment supports a cautious monetary policy stance
• Special operations in fiscal policy, in conjunction with the Federal Reserve's shift to a dovish tone, jointly lower market interest rates.
• Global trade frictions have resurfaced, but the repair of Sino-U.S. relations has boosted market risk appetite.

In the crypto market, with the marginal improvement of macro funds and the continuous inflow of ETFs, the price of Bitcoin has surpassed its historical high of $111,959. The resonance of current macro policies and global financial trends may help the crypto market to embark on a new cycle based on structural capital repricing.

2. Crypto Market Overview

cryptocurrency data analysis

Trading Volume and Daily Growth Rate

As of May 27, the daily average trading volume in the market was $117.4 billion, an increase of 15.8% compared to the previous period, indicating a continued rise in capital activity. The overall market exhibited high volatility characteristics, with multiple instances of single-day trading volumes exceeding 50% increases. During the two phases from May 6 to 12 and from May 21 to 22, trading volume saw a significant surge, with single-day trading volume once breaking $180 billion. During this period, the price of BTC broke through $100,000 and $110,000, respectively, significantly heating up bullish sentiment in the market.

Total market capitalization and daily growth

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's market share is 62.6%, and ETH's market share is 9.6%, with the latter showing a growth of 29.7% compared to the previous period, indicating a continued preference for fund allocation to ETH. Since May 8, after the total market capitalization broke through $3.3 trillion, it has been steadily rising, showing a clear trend of structural market repair.

Popular tokens launched in May

Among the popular tokens launched in May, VC-backed projects still dominate, including Layer 2 projects SOPH and B2. Additionally, USD1, as one of the hot narratives in May, has also garnered widespread market attention for related projects such as B, Lista, and Staketone.

3. On-chain Data Analysis

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

In May, BTC ETF inflows reached $5.77 billion. With multiple countries reaching a phased pause agreement on tariff policies, market sentiment improved, driving Bitcoin prices to a strong rebound and setting a new historical high of $111,959. As of May 28, Bitcoin's price increased from $94,212 to $108,969 within the month, a rise of about 13.5%.

In May, ETH ETFs saw an inflow of $317 million. Benefiting from expectations of the Pectra upgrade and the easing of macro policies, the price of ETH increased significantly, rising from $1,794 at the beginning of the month to $2,635, a rise of 31.9%.

Analysis of stablecoin inflow and outflow situation ###

In May, stablecoin inflows amounted to approximately $7.28 billion, mainly from USDT and USDC. With the easing of macro policies, the crypto market has experienced a significant correction, while the stablecoin market continues to show strong growth momentum. USDT, USDE, and DAI have become the main drivers of growth this month.

4. Price Analysis of Major Currencies

BTC price change analysis

Bitcoin is struggling to maintain above $109,588, indicating that there is buying interest every time there is a slight pullback. It has risen for seven consecutive weeks, and if the trend continues, it will pave the way for further gains. Institutional investors continue to inject capital into Bitcoin exchange-traded products, recording an inflow of $2.9 billion last week.

Bulls are trying to push and maintain the price above $109,588. Rising moving averages and an RSI nearing the overbought zone indicate an upward trend. If it can push up to $111,980, BTC/USDT could soar to $130,000. On the downside, the 20-day EMA($104,886) is a key support level. A break below could lead to a price drop to $100,000.

ETH price change analysis

Ethereum rebounded from the 20-day EMA on May 25 at $2,425, showing strong demand at lower price levels. Bulls will again attempt to break through the $2,738 resistance level. If successful, ETH/USDT could surge to $3,000, with bears likely trying to halt the rise around $2,850.

If the price retraces or encounters resistance and falls below the 20-day EMA, it indicates that the bulls' control is weakening. At this point, the price may drop to $2,323, and then further down to $2,111.

( Price Change Analysis of SOL

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

The seller needs to break the price below the 20-day EMA to prevent further increases. If this support level is broken, it may drop to the 50-day SMA ($151). If it rebounds from the 50-day SMA, it may lead to price consolidation between $153 and $188.

5. Hot Events of This Month

( USD1 ecology

In mid-May, as the price of BTC broke through its historical high and a trading platform launched USD1, its popularity skyrocketed, attracting market attention towards the USD1 ecological cooperation projects. As of May 28, the market capitalization of USD1 had surpassed 2.1 billion USD, rising to become the seventh largest stablecoin. The core advantage of USD1 lies in its issuance 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 for stablecoin legislation". Recently, the prices of multiple USD1 partner-related tokens have surged, fueling market enthusiasm for the "WLFI + USD1" concept. If the U.S. stablecoin legislation is successfully passed, USD1 and its partner projects are expected to play a significant role in the future crypto ecosystem.

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

( Believe has risen to become a new star 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 approaching $310 million at one point. The platform focuses on the concept of "social assetization," where users can automatically trigger token issuance by posting specific tweets on social media.

With an innovative token issuance mechanism and the explosive rise of Launchcoin, the activity level of the Believe platform has rapidly increased. However, after the official over-supported token $YAPPER was launched, it plummeted by more than 66%, raising questions in the community and causing a sharp decline in ecological enthusiasm. As of May 28, Believe has issued more than 27,000 tokens, with a total market capitalization of approximately $290 million, of which Launchcoin contributed nearly 63%.

Overall, the current MEME market platforms are highly homogeneous. Although Believe has simplified the token issuance process, it has not changed the logic of MEME issuance. Whether it can maintain its popularity in the future depends on whether it can continue to innovate or create projects with wealth effects.

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

6. Outlook for Next Month

( stablecoin bill approval progress

This month, the stablecoin "GENIUS Act" has passed the motion for debate and entered the amendment process. As the bills in both chambers advance rapidly, the two parties have reached a rare consensus on the regulation of crypto assets, and the bill is expected to complete the legislative process by Q4 2024.

The core of the "GENIUS Act" includes restrictions on issuance qualifications, reserve requirements, compliance obligations, user protection, and international applicability. The act stipulates that only certain financial institutions can issue payment stablecoins, which must be backed by 100% highly liquid assets, with strict segregation of customer assets. Issuers are required to regularly disclose reserve conditions, undergo audits, and establish a complete compliance system. The act also imposes restrictions on overseas issuers and large technology companies, requiring them to adhere to equivalent regulatory standards in the United States.

The "GENIUS Act" is not only a regulatory framework for stablecoins but also a strategic move by the United States to strengthen the international dominance of the digital dollar. Hong Kong has currently passed relevant ordinance drafts, and the United States is likely to follow suit. In the future, stablecoin projects with strong compliance are expected to gain greater market recognition.

) Ethereum ETF pledge approval progress

In April, US regulators postponed the decision on the relevant Ethereum ETF to June 1, with a final deadline at the end of October. In contrast, the Ethereum ETF staking in Hong Kong has progressed quickly, with several funds already approved to provide staking services.

Based on previous experience, Hong Kong usually leads the United States, so the market expects that the U.S. regulatory authorities will also reach a regulatory framework on related mechanisms in the near future, promoting the final approval of the Ethereum spot ETF. Once this move is realized, it will not only promote the institutionalization process of Ethereum, but also bring a new wave of market heat for Ethereum and related assets such as Lido and Eigen.