Cryptocurrency Market Weekly & Monthly Review: Navigating the Direction in Weakness
1. May Wrap-up: Extreme Divergence Between Macro and Crypto
In May, the global financial markets showed a pattern of “US stocks rallying, commodity differentiation, and crypto weakening independently.” The S&P 500 rose 5.15% for the month, the Nasdaq gained 8.36%, both hitting new record closing highs, with the S&P extending its ninth consecutive weekly increase—the longest streak since December 2023. The US dollar index fluctuated around 99 throughout the month. Gold declined 1.29% (its third consecutive monthly decline), silver rose 2.1%, WTI crude oil fell over 6%, marking the largest monthly drop in nearly five years.
Crypto performance in May was the worst: Bitcoin started the month surging toward a recent high near 82,700, then dipped to a low of 72,450, likely ending with a bearish candle with an upper shadow, approximately a 9.7% decline. Ethereum began above 2,400, touched a low of 1,963, dropping over 12% for the month, with the 2,000 USD level shifting from support to resistance. Crypto was the only major asset class this month not to follow macro bullish signals—while US stocks hit new highs, gold rebounded, and oil declined, crypto failed to rally effectively, instead showing “quick rises followed by pullbacks” in response to each positive stimulus.
2. This Week (5.25-5.31) Core Event Review
1. Macro Environment: US-Iran Tensions Fluctuate, Inflation Remains Suppressed
This week’s market focus was on US-Iran negotiations. On Wednesday, reports of a 60-day understanding memorandum caused US stocks and gold to rise; but the White House quickly denied it, with Trump setting “red lines,” keeping geopolitical uncertainty high. Meanwhile, April PCE inflation hit a three-year high, and GDP growth was revised down to 1.6%, fueling stagflation fears. The Fed’s hawkish tone strengthened, with markets pricing in about a 50% chance of one rate hike this year, and the 2-year US Treasury yield stabilized above 4%. Overall macro conditions remain risk-averse, with crypto reacting very sensitively.
2. Capital Flows: ETF Outflows Continue, Institutional Retreat
Bitcoin spot ETFs experienced net outflows for six consecutive trading days, totaling $1.55 billion, erasing most of the inflows since 2026. Major issuers like BlackRock and Fidelity reduced holdings on May 27, with BlackRock selling about 7,050 BTC and 31,700 ETH in a single day. Ethereum’s fundamentals weakened: Harvard’s holdings were liquidated, Goldman Sachs significantly cut positions, and key ecosystem personnel resigned in batches (at least 8 core members left in four months). Layer 2 addresses halved, network upgrades delayed to Q3—these negative fundamentals, combined with capital fleeing, caused Ethereum’s underperformance relative to Bitcoin.
3. Technical Analysis: Breakdowns and Weak Consolidation
Bitcoin: Broke below 78,000 from above early in the week, reaching a low of 72,450, closing with a large bearish candle on the weekly chart, forming a “lower lows, lower highs” bearish structure on the daily. The 4-hour chart shows consolidation between 72,450 and 74,200, currently trading in the 73,000-74,000 range.
Ethereum: Broke below the 2,000 psychological level, touching 1,963, with a bearish weekly candle and a bearish daily pattern. The 4-hour range is 1,975-2,045, currently oscillating around 1,980-2,030.
4. Deep Reasons for Decoupling Between Crypto and US Stocks
The most warning signal this week: US stocks hit new highs while crypto declined. This divergence stems from:
- Re-emerging rate hike expectations: Crypto is more sensitive to interest rates than stocks; after the PCE surprise, funds withdrew from high-leverage assets first.
- ETF capital reversal: After inflows of $2.44 billion in April, May saw continuous outflows, with institutional sentiment turning 180 degrees.
- Ecosystem narrative vacuum: Ethereum’s delay in upgrade and Layer 2 shrinkage lack new stories to attract incremental funds.
- Technical support breach: Bitcoin broke below the key psychological level of 75,000, triggering stop-loss liquidations.
3. June Outlook: Key Variables and Potential Turning Points
1. Macro Focus: Fed Meeting (June 16-17)
The first rate decision under Powell’s leadership, market focus on:
- Dot plot: Will it imply one rate hike this year?
- Statement language: Will it sound more hawkish on inflation?
- Economic forecasts: Revisions to GDP, PCE, and unemployment.
If hawkish signals are released, crypto could face further pressure; if unexpectedly dovish (less likely), a rebound could occur.
2. Geopolitical Mainline: US-Iran 60-day Ceasefire Window
If the understanding memorandum is signed, oil prices may continue falling, with US stocks and gold supported. But can crypto benefit? Historically, initial easing of geopolitical tensions favors gold and US stocks first; crypto tends to lag unless clear risk appetite signals emerge (e.g., ETF inflows resume, stablecoin issuance increases).
3. Internal Crypto Catalysts
- CLARITY Act: If passed by the Senate, Standard Chartered predicts Bitcoin ETFs could attract an incremental $4-8 billion, with current market probability estimates at 62%-66%. This is the most promising positive event for June.
- Ethereum Glamsterdam upgrade: Delayed to Q3, leaving June as a “vacuum period” with no independent narrative.
- On-chain data: Monitor exchange balances, total stablecoin supply, and miner holdings. Currently, exchange BTC balances are at an 8-year low; selling pressure is not from existing holdings but from insufficient new inflows.
4. Key Technical Levels (June Core Range)
Asset | Strong Support Below | Central Range | Strong Resistance Above | Monthly Trend
---|---|---|---|---
Bitcoin | 70,000-71,000 | 73,000-75,000 | 78,000-80,000 | Bearish structure intact, reclaiming 80,000 turns bullish
Ethereum | 1,900-1,920 | 2,000-2,100 | 2,200-2,250 | Extremely weak, needs to regain above 2,100 to stabilize
Monthly Strategy: In the first half of June, expect continued consolidation and testing of lows, focusing on support at 70,000-72,000 (BTC) and 1,900-1,950 (ETH). A daily bullish breakout with volume that recovers key moving averages (BTC above 75,000, ETH above 2,100) could mark a bottom; otherwise, continue to trade rebounds as short-term opportunities.
4. Weekend and Early Next Week Trading Ideas
Liquidity is thin over the weekend, likely leading to range-bound trading between 73,000-74,000 for BTC and 1,980-2,030 for ETH. Short-term, consider high-probability long/short at the range boundaries, but reduce position sizes to avoid sudden spikes.
Next week’s key focus:
- Monday: Any weekend news in Asia?
- Tuesday: US May ISM Manufacturing PMI
- Wednesday: Bank of Canada decision, US ADP employment
- Thursday: ECB decision
- Friday: US May Non-Farm Payrolls—most important weekly data.
May is behind us; whether profit or loss, it’s just the prelude. June is the “macro verification month”—whether rate hike expectations materialize, whether bills pass, and whether Ethereum’s ecosystem can halt its decline will determine the second half of the year. Stay patient, disciplined, and ready—opportunities favor those prepared.
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