Last week (May 20-May 26), BTC price had insufficient momentum after reaching $110,000 several times, and quickly pulled back to enter a high-level consolidation phase. From May 21 to 23, BTC reached a strong peak, breaking through the important psychological barrier of $110,000, and hit a new high of $111,980 before a slight pullback. Subsequently, due to the significant weakening of bullish momentum, BTC failed to hit $111,000 several times, and the price quickly entered a range of shocks and consolidation. As of May 27, the BTC price stabilized at around $109,741, with the largest increase of 7.48% during the week.
Last week, ETHs trend was basically consistent with BTC. Affected by Trumps dinner and concerns about the tariff war between Europe and the United States, the trading volume increased from May 22 to 23, and the long-short game was stalemate. The ETH price rose to $2,734.23 and then quickly dropped to below $2,500, and then entered a shock consolidation phase. The current ETH price is around $2,638, with the largest intra-week fluctuation of 11.94% (data source: Binance spot, May 27 17:13).
Market Interpretation
BTC and ETH spot ETFs attract strong funds, and capital momentum continues to be released
Since May, BTC spot ETFs have shown significant capital attraction. As of May 26, the cumulative net inflow of BTC spot ETFs has reached $44.53 billion. There were only two trading days with small net outflows during the month, and the rest were net inflows, of which the net inflow on four days exceeded $600 million, and more than 80% of the trading days had net inflows of more than $200 million.
ETH spot ETF also showed a warming trend. Since the launch of trading on May 12, there have been only two net outflows, and the single-day net inflow on May 22 reached $110 million, a new high since February, reflecting the markets rapid recognition of ETH spot ETF.
The strong inflows into the two major spot ETFs, BTC and ETH, are continuing to strengthen the markets expectations for funding, becoming an important supporting factor for the current mainstream currency market.
The Beautiful Big Bill plus the expectation of tariff escalation has led to a correction in market risk appetite
On May 22, the U.S. House of Representatives passed the One Big Beautiful Bill Act proposed by President Trump, which plans to raise the debt ceiling from the current $36.1 trillion to $40.1 trillion. At that time, the U.S. debt balance will be close to 140% of GDP.
Changes in fiscal prospects have triggered a reassessment of the US debt repayment capacity. This week, the US 10-year Treasury yield returned to a high of 4.5%. Higher bond yields coupled with new policy uncertainties have put pressure on major US stock indexes. As of May 26, the three major stock indexes have fallen by more than 2% this week, with the Dow Jones Industrial Average falling 250 points, the SP 500 falling 0.7%, and the Nasdaq falling 1%.
The US dollar index fell back this week, falling for the first time in four weeks, with a weekly decline of 1.03%, hitting a three-week low. Gold prices were relatively strong, with London gold rising 1.98% this week and closing at $3,359.90/ounce on May 26.
US-EU trade tensions eased, and risk aversion cooled in the short term
On May 23, US President Trump publicly criticized the EU for structural injustice to the US in trade and announced that a high tariff of 50% would be imposed on EU products from June 1, triggering a rise in risk aversion in the global market. On May 26, the EU released a signal of easing and announced that it would accelerate the process of trade negotiations with the US. After a call between EU Commission President von der Leyen and Trump, the two sides agreed to close consultations and extend the tariff negotiation period. The original tax date was postponed to July 9.
In the short term, the risk of escalating trade frictions has temporarily eased, and safe-haven asset prices are under pressure. Investors are advised to continue to pay attention to the progress of subsequent negotiations between the United States and Europe and the impact of Trumps policy expectations on global asset allocation.
BTC fluctuates at high levels, institutions dominate trading, and retail investors are still reluctant to participate
Last week, the price of BTC broke through $111,000, setting a new record high, but the trading structure shows that this round of rise is mainly driven by institutions. Google Trends data shows that the search popularity of the keyword BTC (Bitcoin) is much lower than the same period in 2021, and retail investor participation is still limited.
The derivatives market shows that traders remain cautious. As of May 23, the Large Trader Long-Short Ratio (Position) of Binance BTC/USDT perpetual contract was 1.61, which showed that long positions were dominant, but it had fallen from the previous period. The Total Position Account Long-Short Ratio was 0.46, reflecting that the proportion of retail long positions was low.
Market Hotspots
Crypto narrative enters the political arena, Trump dinner sends symbolic signals
On the evening of May 22, former US President Trump held a VIP dinner at the National Golf Club and invited guests who held his personal tokens to participate. On-chain assets officially entered high-level political activities as an identity access mechanism for the first time. Trump once again expressed his support for encryption and proposed the idea of establishing a US BTC reserve.
BTC conference is approaching, short-term volatility may usher in a turning point
Traders are paying attention to the BTC conference held in Las Vegas from May 27 to 29. QCP Capital said that short-term market sentiment remains defensive, BTC implied volatility is still high, and volatility is expected to gradually decline after the key speeches, and the market may usher in a direction choice.
Hong Kong legislates to promote stablecoin regulation, accelerating compliance process
On May 21, the Legislative Council of the Hong Kong Special Administrative Region of China passed the Stablecoin Bill in the third reading, establishing a licensing system for issuers of fiat currency stablecoins. It is expected that compliant stablecoins will be implemented by the end of the year at the earliest, bringing policy clarity to the virtual asset ecosystem.
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