Crypto Market Analysis Report for May 2025

1. Macroeconomic Environment

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, trade policy brings uncertainty, and fiscal policy affects market expectations through operations similar to quantitative easing. Against this backdrop, the crypto market demonstrates strong resilience, and the global risk asset structure may undergo a new round of revaluation.

inflation trend

In April, the seasonally adjusted CPI year-on-year fell to 2.3%, the lowest level since February 2021, indicating that price pressures continue to ease. The month-on-month CPI, after seasonal adjustment, recorded 0.2%, showing insufficient momentum for a short-term rebound in inflation. At the same time, the U.S. Treasury initiated a $40 billion bond buyback operation, seen as a measure to release liquidity and refinance at low interest rates, becoming an important force supporting the prices of risk assets.

labor market

In April, non-farm employment increased by 177,000, far exceeding market expectations, reflecting the resilience of the employment market. This data provides a basis for maintaining a wait-and-see policy. Continued strong employment has alleviated market concerns about a recession, but it has also weakened the possibility 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 targeting" mechanism may be abandoned. In the future, the period of maintaining high interest rates may be extended, and even through balance sheet expansion, the Fed may increase its 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 rate cuts in the short term.

Trade Policy and Global Economic Outlook

The news of increased tariffs on EU goods announced in early May triggered market fluctuations. China implemented a "reserve requirement ratio cut + interest rate cut" combination policy, releasing 1 trillion yuan in liquidity, which is seen as the start of a new round of easing cycle, and the market's expectations for improvement in China-US relations have heated up.

2. Crypto Market Overview

volume analysis

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

market cap 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 steadily risen, showing a clear trend of structural market recovery.

popular new coins

Among the popular tokens launched in May, projects with venture capital backgrounds dominate, including Layer 2 projects such as SOPH and B2. In addition, the stablecoin USD1 and its associated projects like B, Lista, and Staketone have garnered widespread attention.

3. On-chain Data Analysis

ETF capital flow

In May, the net inflow of BTC ETF was approximately $5.77 billion, and the net inflow of ETH ETF was about $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%. Ethereum rose from $1,794 to $2,635, an increase of 31.9%.

stablecoin market

In May, the stablecoin market continued its strong growth momentum, with total circulation increasing by approximately $7.28 billion, mainly driven by the growth of USDT, USDE, and DAI.

4. Mainstream Cryptocurrency Price Analysis

Bitcoin ( BTC )

BTC price has broken its historical high to $111,959. Bulls are trying to maintain the price above $109,588, with buying interest stepping in on every dip. The upward trend is evident, and the short-term target may be $130,000. The key support level is near the 20-day moving average at $104,886.

Ethereum ( ETH )

ETH rebounded from the 20-day moving average ($2,425), showing strong demand at lower price levels. Bulls will attempt to break through the $2,738 resistance level, and if successful, may reach $3,000. Support levels below are at $2,323 and $2,111.

Solana ( SOL )

SOL found support at the 20-day moving average ($169), and the bulls will attempt to break through the $188 resistance level again. If successful, it may rise to the $210 to $220 range. Support below is near the 50-day moving average at $151.

5. Hot Events

USD1 ecological development

In mid-May, the popularity of the USD1 stablecoin surged, with a market capitalization exceeding 2.1 billion USD, 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. The prices of various tokens in the USD1 ecosystem collaboration projects have risen significantly, driving the "WLFI+USD1" concept to be sought after in the market.

The rise of the Believe platform

The core token of the Believe platform, Launchcoin, surged in May, with its market capitalization approaching $310 million at one point. The platform emphasizes the concept of "social assetization," allowing users to trigger token issuance by tweeting on the X platform. However, the excessive support for the $YAPPER token, which plummeted, sparked controversy and led to a decline in ecosystem enthusiasm.

6. Future Outlook

Stablecoin Bill Progress

The "GENIUS Act" has passed the debate motion and entered the amendment process. The core of the act includes restrictions on issuance qualifications, reserve requirements, compliance obligations, and other contents. This act is not only a regulatory framework but also a strategic initiative for the United States to strengthen the international status of the digital dollar.

Ethereum ETF staking approval

The SEC has postponed its decision on some Ethereum ETFs until June 1st. Hong Kong has approved some Ethereum ETFs for staking. The market expects that the US regulators may soon reach a framework for the relevant mechanisms, advancing the final approval of Ethereum spot ETFs. This could drive a new wave of market enthusiasm for Ethereum and related assets such as Lido, Eigen, etc.