Matrixport Market Observation: BTC Consolidates at High After Peaking at $110,000, Institutions and ETFs Become Core Support

Last week (May 20 - May 26), the BTC price showed insufficient momentum after multiple attempts to reach $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 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 stalemate between bulls and bears. ETH price peaked at $2,734.23 before quickly dropping below $2,500, then entering a phase of consolidation. Currently, ETH price is around $2,638, with a maximum weekly fluctuation of 11.94% (data source: Binance Spot, May 27, 17:13).

Market Interpretation

BTC and ETH Spot ETFs Strongly Attract Capital, Continuous Release of Fund Momentum

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 2 trading days in the month with small net outflows, while the rest were net inflows, with 4 days having a single-day net inflow 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 capital, becoming an important support factor for the current mainstream cryptocurrency market.

"One Big Beautiful Bill Act" Combined with Tariff Upgrade Expectations, Market Risk Appetite Adjusts

On May 22, the U.S. House of Representatives passed President Trump's "One Big Beautiful Bill Act," proposing 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 in the market. 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 retreated 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 European 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 was 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 High-Level Fluctuations, Institutional Trading Dominates, Retail Participation Remains Low

Last week, BTC price broke through $111,000, reaching a 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 "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 retreated from previous levels. The "Total Open Interest Long-Short Ratio" was 0.46, reflecting a low proportion of retail bulls.

Market Highlights

Crypto Narrative Enters Political Arena, Trump's Dinner Sends Symbolic Signal

On the evening of May 22, former U.S. President Trump held a VIP dinner at the National Golf Club, inviting guests holding his personal tokens to participate. On-site, blockchain assets were officially introduced as an identity access mechanism for high-level political activities, with Trump reiterating his support for crypto and proposing the idea of "establishing a U.S. BTC reserve."

BTC Conference Approaches, Short-term Volatility May Face 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 after key speeches conclude, volatility will gradually decrease, 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 Ordinance" on 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.

Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.