May 2025 Crypto Market Analysis Report

1. Macroeconomic Situation

In May 2025, the U.S. economy is at a critical turning point. Inflation continues to decline, the employment market remains resilient, monetary policy enters a wait-and-see period, and trade policies bring new uncertainties. At the same time, fiscal policy influences market expectations through operations similar to quantitative easing and adjustments in debt ratings. Against this backdrop, the crypto market demonstrates strong resilience, and the structure of global risk assets may face a new round of revaluation.

inflation trend

The annual CPI in April fell to 2.3%, the lowest since February 2021, indicating a continued alleviation of price pressures. During the same period, the U.S. Treasury initiated a $40 billion treasury bond repurchase operation, viewed by the market 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.

job market

In April, non-farm payrolls increased by 177,000, exceeding market expectations and reflecting the resilience of the job market. This provides a basis for the Federal Reserve to maintain a wait-and-see policy. The continued strength in employment both alleviates market concerns about a recession and diminishes the likelihood of multiple unexpected rate cuts within the year.

monetary policy trends

The Federal Reserve Chairman stated that he will reevaluate 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 Fed may extend the period of high interest rates and even increase its holdings of medium- and long-term government bonds through balance sheet expansion to control the rise in long-term interest rates.

Trade Policy and Global Economy

In early May, the government announced an increase in tariffs on EU goods, which, although postponed for implementation later, has already impacted market sentiment. On the Chinese side, 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 an improvement in China-US relations have increased.

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, indicating a continuous rebound in capital activity. During the two periods from May 6 to 12 and from May 21 to 22, trading volume surged significantly, with a single day's trading volume once surpassing $180 billion, and BTC prices breaking $100,000 and $110,000 respectively, leading to a notable increase in bullish sentiment in the market.

market capitalization change

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 continued preference for fund allocation to ETH. Since May 8, after the total market capitalization exceeded $3.3 trillion, it has steadily risen, showing a clear trend of structural market repair.

new popular tokens launched

Among the popular tokens launched in May, venture capital-backed projects dominate, including Layer 2 projects SOPH, B2, and others. In addition, as one of the popular narratives in May, stablecoins and their associated projects such as B, Lista, Staketone, etc. have also gained widespread attention in the market.

3. On-chain Data Analysis

ETF capital flow

In May, BTC ETF net inflow reached $5.77 billion, while ETH ETF net inflow was $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 stablecoin market continued its strong growth momentum, with a total circulation increase of approximately $7.28 billion. USDT, USDE, and DAI became the main drivers of growth this month.

4. Mainstream Cryptocurrency Price Analysis

Bitcoin ( BTC )

The BTC price is struggling to maintain above $109,588, indicating that there is buying interest during each slight pullback. If buyers can extend the upward trend into the eighth week, it will pave the way for further gains. Institutional investors continue to inject funds into Bitcoin ETF products. The rising moving averages and the RSI approaching the overbought area suggest that the path of least resistance is upward. If it breaks above $111,980, BTC could soar to $130,000. Key support levels below are $104,886 and $100,000.

Ethereum ( ETH )

ETH rebounded from $2,425 on May 25, showing strong demand at lower price levels. Bulls will attempt to break through the resistance at $2,738 again. If successful, ETH could rise to $3,000, although resistance may be encountered around $2,850. Support levels below are at $2,323 and $2,111.

Solana(SOL)

SOL found support at $169 on May 25, indicating positive market sentiment. Bulls will attempt to break through the resistance level at $188 again. If successful, SOL could rise to $210, or even $220. The support level below is at $151. A rebound from this position could lead to price consolidation between $153 and $188.

5. Hot Events This Month

USD1 ecological development

In mid-May, as the price of BTC reached new highs and a certain trading platform launched USD1, its popularity surged, attracting market attention to related ecological projects. As of May 28, USD1's market capitalization surpassed 2.1 billion USD, making it the seventh largest stablecoin. The main advantage of USD1 lies in its issuance being led by a specific family, making it the first stablecoin project to receive endorsement from high-ranking political figures.

The current narrative surrounding USD1 revolves around "political endorsement + RWA track + expectations for the stablecoin bill". Recently, the prices of several tokens related to USD1 partners have surged significantly, driving the market's enthusiasm for related concepts. If the U.S. stablecoin bill is passed in the future, USD1 and its deeply cooperating projects are expected to occupy an important position in the future crypto ecosystem.

The rise of the Believe platform

As of May 28, the core token Launchcoin of the Believe platform rose from $0.014 at the beginning of the month to a peak of $0.36, with a market capitalization that once approached $310 million. The platform focuses on the concept of "social assetization," where users only need to post tweets in a specific format on social platforms to automatically trigger token issuance.

The platform's activity has rapidly increased, and the number of new tokens has jumped to third place on the MEME platform. However, the officially supported token $YAPPER plummeted over 66% after its launch, raising doubts in the community, and the ecological heat subsequently dropped sharply. As of May 28, Believe has issued over 27,000 tokens, with a total market value of approximately $290 million, of which Launchcoin accounts for a significant proportion.

Overall, the MEME market platforms are highly homogeneous. Although Believe simplifies the token issuance process, it does not alter the logic of MEME issuance. Whether it can maintain its popularity in the future depends on its ability to continue innovating or create projects with wealth effect.

6. Outlook for Next Month

progress on the stablecoin bill

This month, the "GENIUS Act" passed the motion for debate and entered the amendment process. As the two parties reached a consensus on the regulation of crypto assets, the bill is likely to complete legislation by Q4 2024. The core of the bill includes restrictions on issuance qualifications, reserve requirements, compliance obligations, user protection, and international applicability.

The bill is not only a regulatory framework for stablecoins but also a strategic move for the United States to strengthen the international status of the digital dollar. Currently, Hong Kong has passed the "Stablecoin Issuer Ordinance Draft," and the U.S. will likely follow closely behind. Against this backdrop, stablecoin projects with strong compliance are expected to gain greater market recognition.

Ethereum ETF pledge approval

The US regulatory agency has postponed the decision on the Ethereum Trust ETF until June 1, with a final deadline at the end of October. In contrast, the Hong Kong Ethereum ETF staking has progressed more quickly, with multiple funds already approved for staking services.

Based on past experience, Hong Kong usually leads the United States. Therefore, the market expects that the U.S. regulatory authorities will reach a regulatory framework regarding the relevant mechanisms soon, promoting the approval of the Ethereum spot ETF. Once achieved, it will drive the institutionalization process of Ethereum, and related assets such as Lido and Eigen may welcome a new wave of market enthusiasm.