Analysis of the crypto market in May 2025

1. Macroeconomic Situation

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 policies bring new uncertainties, and the fiscal side influences market expectations through special operations and debt rating adjustments. Against this backdrop, the crypto market demonstrates strong resilience, and the structure of global risk assets may undergo a new round of reevaluation.

inflation trend

In April, the seasonally adjusted CPI year-on-year dropped to 2.3%, the lowest since February 2021, indicating that price pressures are continuously easing. The seasonally adjusted CPI month-on-month recorded 0.2%, showing insufficient momentum for inflation to rebound in the short term. At the same time, the U.S. Treasury Department initiated a $40 billion Treasury bond repurchase operation, which the market generally views as a measure to release liquidity, becoming an important force supporting the prices of risk assets.

labor market

In April 2025, non-farm payrolls 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 policy observation. The continued strength in employment alleviates concerns about a recession on one hand, while on the other hand, it also diminishes 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 targeting" mechanism may be abandoned. He pointed out that frequent supply-side shocks are changing the traditional policy environment, prompting more focus on structural inflation risks. In the future, the period of maintaining high interest rates may be extended, and even through balance sheet expansion 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 urgent need for preemptive rate cuts in the short term.

Trade Policy and Global Economic Outlook

At the beginning of May, it was announced that a 50% tariff would be imposed on EU goods starting from June 1. Although this was postponed to July 9, the threat of high tariffs has already impacted market sentiment. In China, the central bank implemented a "reserve requirement ratio cut + interest rate cut" 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, with market expectations for improved China-U.S. relations heating up and risk appetite simultaneously increasing.

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% from the previous period, indicating a continued rise in capital activity. The overall market exhibited high volatility, with several instances of daily trading volume exceeding a 50% increase. During the two periods from May 6 to May 12 and from May 21 to 22, trading volume surged significantly, with daily trading volume once breaking $180 billion. During this period, BTC prices broke through $100,000 and $110,000, significantly boosting market bullish sentiment.

Market Cap Analysis

As of May 27, the total market capitalization of cryptocurrencies has rebounded to $3.56 trillion, up 17.0% from last month. 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, indicating a sustained preference for ETH in this round of capital allocation. Since May 8, the total market capitalization has risen above $3.3 trillion and has been steadily climbing since then, showing a clear trend of structural market recovery.

New Trending Tokens

Among the popular tokens launched in May, background projects still dominate, including Layer 2 projects SOPH and B2. In addition, a stablecoin has emerged as one of the popular narratives in May, and this stablecoin along with its associated projects such as B, Lista, and Staketone have also gained widespread attention in the market.

3. On-chain Data Analysis

BTC, ETH ETF fund flow

In May, BTC ETF inflows reached $5.77 billion. As of May 28, the price of Bitcoin rose from $94,212 to $108,969 within the month, an increase of about 13.5%.

In terms of ETH, benefiting from upgrade expectations and eased macro policies, the price increase is 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%. ETH spot ETFs have also attracted capital inflows, with a net inflow of approximately $317 million in May.

stablecoin fund flows

In May, stablecoin inflows amounted to approximately $7.28 billion, primarily driven by USDT and USDC. With the easing of macro policies, the crypto market experienced a significant correction. The stablecoin market continues to maintain a strong growth momentum, with USDT, USDE, and DAI being the main drivers of growth this month.

4. Mainstream Currency Price Analysis

BTC price analysis

Bitcoin is struggling to maintain above $109,588, indicating that every slight pullback sees buying interest come in. It has risen for seven consecutive weeks, and if buyers can extend this trend into the eighth week, it will pave the way for further increases. Institutional investors see long-term opportunities and continue to inject funds into Bitcoin exchange-traded products.

The rising moving average and the RSI approaching the overbought zone indicate that the easiest resistance direction is upward. If buyers can push the price up to $111,980, the BTC/USDT trading pair may 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 could lead to a drop in price to $100,000.

ETH price analysis

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

If the price retraces from the current level or encounters resistance and falls 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 to $2,111.

SOL price analysis

Solana found support at the 20-day EMA ($169) on May 25, indicating that market sentiment remains positive. 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 upward movement. If there is a rebound from the 50-day SMA, it may lead to the price consolidating in a range between $153 and $188 for a period of time.

5. Hot Events of This Month

a stablecoin ecosystem

In mid-May, as the price of BTC broke historical highs and the launch of this stablecoin on a certain trading platform led to a surge in its popularity, its ecosystem cooperative projects also gained market attention. As of May 28, 2025, the market capitalization of this stablecoin has exceeded $2.1 billion, making it the seventh largest stablecoin. Although there are no significant differences in mechanism design compared to other mainstream stablecoins, its core advantage lies in being issued by a specific background.

The current main narrative of this stablecoin revolves around "special endorsement + RWA track + expectations of the stablecoin bill". Recently, the prices of related tokens from multiple partners such as Buildon, Lista DAO, StakeStone, Haedal, and Cookie have surged significantly, driving the market's high enthusiasm for related concepts. If the U.S. stablecoin bill is successfully passed in the future, this stablecoin, as a project with special endorsement, is expected to occupy a more important position in the crypto ecology along with its deeply cooperating projects.

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 cap nearing $310 million at one point, making it one of the MEME coins with the largest increase recently. The platform focuses on the concept of "social assetization", where users only need to tweet with $TICKER and @launchcoin on the X platform 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 on the platform has jumped to third place among MEME platforms. However, after the official token $YAPPER, which received excessive support, was launched and plummeted over 66%, it triggered community FUD, causing a sharp decline in ecological heat.

As of May 28, Believe has issued over 27,000 tokens, with a total market value of approximately $290 million, of which Launchcoin contributes nearly 63%, and its trading volume accounts 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 practical application scenarios, leading to significant concerns in the community about its long-term sustainability.

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

6. Outlook for Next Month

stablecoin bill approval progress

This month, the "GENIUS Act" passed the motion for debate with a result of 69 votes in favor and 31 votes against, entering the amendment process. With the rapid progress of the stablecoin bills in both the House of Representatives and the Senate, there is a rare bipartisan 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 key elements such as issuance qualification restrictions, reserve requirements, compliance obligations, user protection, and international applicability. The act stipulates that only specific financial institutions are allowed to issue payment stablecoins, and all stablecoins must be 100% backed by highly liquid assets, with strict separation of customer assets. Issuers are required to disclose reserve conditions monthly, accept audits from certified public accountants, and senior management bears legal responsibility for the authenticity of information. At the same time, issuers must establish a complete anti-money laundering and sanctions compliance system and maintain records and monitoring of transaction activities.

The "GENIUS Act" is not only a regulatory framework for stablecoins but also a strategic measure by the United States to enhance the international dominance of the digital dollar by promoting the issuance of compliant stablecoins pegged to the dollar, attracting global capital to U.S. Treasury bonds, and restricting offshore issuing entities. Currently, Hong Kong has passed the "Stablecoin Issuer Ordinance Draft", establishing the first complete regulatory framework for the stablecoin market in Hong Kong. Against this backdrop, stablecoin projects with strong compliance are expected to gain greater market recognition in the future.

Ethereum ETF pledge approval progress

On April 14, regulators postponed their decision on the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF until June 1, with a final decision deadline set for the end of October. The delay is due to regulatory issues concerning staking and the physical subscription/redemption mechanism. In contrast, the progress of staking for the Hong Kong Ethereum ETF has been relatively swift. On April 11, Bosera Fund received regulatory approval to stake up to 30% of its Ethereum holdings starting from April 25, 2025. On April 18, Huaxia Fund is set to launch staking services for its Ethereum spot ETF, becoming the second fund in Hong Kong to offer such services.

Based on previous experiences with the approval of Bitcoin and Ethereum ETFs, Hong Kong typically leads the United States. Therefore, after Hong Kong takes the lead in allowing staking, the market generally expects that the U.S. regulators will also reach a regulatory framework regarding the relevant mechanisms soon, advancing the final approval of the Ethereum spot ETF. Once this move is realized, it will not only promote Ethereum.