Last week (May 20 - May 26), the price of BTC showed insufficient momentum after multiple attempts to break through $110,000, quickly retracing into a high-level consolidation phase. From May 21 to 23, BTC surged strongly, breaking through the important psychological barrier of $110,000, reaching a new high of $111,980 before a slight pullback. Subsequently, due to a significant weakening of bullish momentum, BTC made several unsuccessful attempts around $111,000, and the price quickly entered a range of fluctuations. As of May 27, BTC's price stabilized around $109,741, with a maximum weekly increase of 7.48%.
Last week, ETH's performance was largely in line with BTC. Influenced by multiple factors such as Trump's dinner and concerns over the US-EU tariff war, trading volume increased from May 22 to 23, with a tug-of-war between bulls and bears. ETH's price peaked at $2,734.23 before quickly dropping below $2,500, subsequently entering a phase of consolidation. Currently, ETH's price is around $2,638, with a maximum fluctuation of 11.94% during the week (data source: Binance spot, May 27, 17:13).
Market Interpretation
BTC and ETH spot ETFs show strong capital attraction, with continuous release of funding momentum
Since May, BTC spot ETFs have demonstrated significant capital attraction. As of May 26, the cumulative net inflow into BTC spot ETFs reached $44.53 billion. There were only 2 trading days in the month with small net outflows, while the rest were net inflows, with 4 days seeing single-day net inflows exceeding $600 million, and over 80% of trading days having net inflows above $200 million.
ETH spot ETFs also show a warming trend. Since trading began on May 12, there have only been 2 instances of net outflows, with a single-day net inflow of $110 million on May 22, reaching a new high since February, reflecting the market's rapid recognition of ETH spot ETFs.
The strong inflow of BTC and ETH spot ETFs is continuously reinforcing market expectations for liquidity, becoming an important support factor for the current mainstream cryptocurrency market.
"One Big Beautiful Bill Act" combined with tariff escalation expectations, market risk appetite adjusts
On May 22, the U.S. House of Representatives passed President Trump's "One Big Beautiful Bill Act," which proposes to raise the debt ceiling from the current $36.1 trillion to $40.1 trillion, at which point the U.S. debt balance will approach 140% of GDP.
Changes in fiscal outlook have triggered a reassessment of the U.S. debt repayment capacity. This week, the yield on the U.S. 10-year Treasury bond returned to a high of 4.5%. Rising bond yields combined with new policy uncertainties have put pressure on major U.S. stock indices. As of May 26, the three major indices have all seen cumulative declines of over 2% for the week, with the Dow down 250 points, the S&P 500 down 0.7%, and the Nasdaq down 1%.
The U.S. dollar index adjusted this week, marking its first decline in four weeks, with a weekly drop of 1.03%, reaching a three-week low. Gold prices performed relatively well, with London gold rising 1.98% this week, closing at $3,359.90 per ounce on May 26.
U.S.-EU trade tensions ease, short-term risk aversion cools
On May 23, President Trump publicly criticized the EU for structural unfairness in trade with the U.S., announcing a 50% tariff on EU products starting June 1, which triggered a rise in global market risk aversion. On May 26, the EU released signals of easing, announcing an acceleration of trade negotiations with the U.S. After a phone call between EU Commission President Ursula von der Leyen and Trump, both sides agreed to closely consult and extend the tariff negotiation period. The originally scheduled tax date has been postponed to July 9.
In the short term, the risk of escalating trade friction has temporarily eased, putting pressure on safe-haven asset prices. Investors are advised to continue monitoring the progress of U.S.-EU negotiations and the impact of Trump's policy expectations on global asset allocation.
BTC fluctuates at high levels, institutional trading dominates, retail participation remains low
Last week, BTC's price broke through $111,000, setting a new historical high, but the trading structure indicates that this round of increase was mainly driven by institutions. Google Trends data shows that the search interest for the keyword "BTC (Bitcoin)" is far below the level of the same period in 2021, indicating limited retail participation.
The derivatives market shows that traders remain cautious. As of May 23, the "large trader long-short ratio (open interest)" for Binance BTC/USDT perpetual contracts was 1.61, indicating a bullish dominance, but it has fallen from previous levels. The "total open interest long-short ratio" is 0.46, reflecting a low proportion of retail bulls.
Market Highlights
Crypto narrative enters the political arena, Trump's dinner sends symbolic signals
On the evening of May 22, former U.S. President Trump held a VIP dinner at the National Golf Club, inviting guests who hold his personal tokens. On-site, blockchain assets were officially introduced as an identity access mechanism for high-level political activities for the first time, with Trump reiterating his support for crypto and proposing the idea of "establishing a U.S. BTC reserve."
BTC conference approaching, short-term volatility may see a turning point
Traders are focusing on the BTC conference taking place in Las Vegas from May 27 to 29. QCP Capital stated that short-term market sentiment remains defensive, with BTC implied volatility still at a high level. It is expected that volatility will gradually decrease after key speeches, and the market may face a directional choice.
Hong Kong legislation advances stablecoin regulation, compliance process accelerates
On May 21, the Legislative Council of the Hong Kong Special Administrative Region passed the "Stablecoin Regulation Bill" in its third reading, establishing a licensing system for fiat-backed stablecoin issuers. It is expected that compliant stablecoins will be implemented by the end of the year, bringing policy clarity to the virtual asset ecosystem.
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