As global capital markets move into a key mid-Q2 positioning phase, policy expectations in traditional finance and microstructure dynamics in the crypto market are now deeply intersecting. This week, the highly anticipated May FOMC meeting officially concluded, with the Federal Reserve’s policy signal setting the tone for macro liquidity expectations in the second half of the year. At the same time, after absorbing the shock of a native on-chain crisis, the Crypto market has seen large-scale dip-buying from Wall Street’s “old money” institutions.

I. Macro and Traditional Finance: A Dovish FOMC Probe and the Establishment of a Tactical Long Window

1. The May FOMC sets the tone: rate-hike fears fade and liquidity expectations stabilize

The most important macro event this week was the conclusion of the May FOMC meeting. As expected, the Federal Reserve left the federal funds target range unchanged, in line with broad Wall Street consensus.

More importantly, Fed Chair Jerome Powell delivered a relatively dovish signal in the subsequent press conference. Although recent inflation data, including core CPI and PCE, has shown some stickiness, the Committee believes the current policy rate is already sufficiently restrictive, and that the likelihood of the next move being a rate hike is very low.

In addition, the Fed’s description of the labor market as “moving toward better balance” suggests that it is gradually building the economic justification for future rate cuts.

SunX view: This FOMC meeting has effectively erased the market’s earlier panic pricing around a possible restart of hikes later this year. With policy uncertainty reduced, a relatively safe tactical long window has now been established for global risk assets — including U.S. equities and Crypto — through year-end.

2. U.S. equity sector rotation: the AI rally continues, but cross-market hedging still matters

With the Fed providing policy cover, U.S. equities remain immersed in a soft-landing narrative. Capital continues to rotate rapidly among upstream AI supply-chain names such as memory and optical modules, major tech stocks, and core software names.

Even so, meaningful pricing divergence still exists across major asset classes. Bond markets and prediction markets remain far more cautious than equities when it comes to long-tail inflation risk.

For professional traders, this cross-market pricing mismatch creates attractive arbitrage opportunities. While maintaining long exposure in core tech names or BTC, it remains prudent to build low-cost tail hedges via derivatives, in order to defend against sudden geopolitical black swan events.

II. Crypto Market Fundamentals: Resilience After the Black Swan and the Breakout in Core Assets

1. DeFi trust is hit hard and liquidity rotates back onshore

The native Crypto market has recently suffered a major blow. A large lending protocol, Kelp, was hacked through a multisig vulnerability, causing losses of more than $200 million. In its earlier expansion phase, the protocol reportedly ignored core risk controls and accepted high-risk assets as collateral, eventually leading to destructive bad debt.

This event is a major negative for trust across the broader DeFi lending ecosystem and smart contract public chains. It may not only set back the development of on-chain unsecured lending, but also materially weaken the willingness of compliant traditional capital to seek yield through DeFi channels. That, in turn, may accelerate the flow of defensive capital back toward centralized platforms with 100% Proof of Reserves.

2. Core assets break higher against the trend: BTC pushes above $81,000 and ETH stabilizes near $2,360

Even as fear from the on-chain crisis spreads, leading crypto assets have shown powerful resilience and upward momentum under the support of improved macro expectations. According to the latest data, BTC has broken decisively above $80,000 and is trading around $81,100, while ETH has climbed steadily and stabilized near $2,360.

In this environment, the Matthew Effect of capital concentrating into core assets is being amplified dramatically. Institutions such as MicroStrategy (MSTR) have shown record-level buying power, spending massive capital in a single week to acquire 34,000 BTC, creating an increasingly strong positive spiral between MSTR’s equity performance and BTC itself.

By contrast, the altcoin market continues to struggle under concentrated control and liquidity exhaustion, with overall PNL performance remaining weak and the investment case facing severe pressure.

3. Futures microstructure divergence: the short squeeze signal is confirmed and the main uptrend begins

Under the combined influence of the earlier security incident and macro volatility, the market’s Futures microstructure had previously shown a significant divergence. Although funding rates across the Futures market had broadly turned negative — reflecting extremely crowded bearish positioning — strong spot buying and ETF flow resonance ultimately reversed the unfavorable setup.

The market has now confirmed a large-scale technical short squeeze, clearing away the main technical barriers that had previously capped the broader market’s upside.

III. ETF Surge and “Old Money” Entry: Nearly $1 Billion in Net Inflows Takes Over Price Discovery

At the darkest moment for on-chain sentiment, traditional Wall Street ETF capital interpreted the Fed’s stabilizing signal as a green light, showing remarkable buying conviction and pushing year-to-date flows decisively back into positive territory.

1. Major players absorb capital as ETF flows return to the spotlight

1. U.S. Bitcoin ETFs: recorded a stunning $996 million in total net inflows last week, with total net assets surpassing the $100 billion threshold and reaching $101.45 billion. BlackRock’s IBIT remained the clear leader, attracting $906 million in just one week and rebounding around 19% from the previous selloff.
2. U.S. Ethereum ETFs: followed closely, recording $275 million in net inflows, of which BlackRock’s ETHA contributed $99.2 million, showing that institutional long-term allocation interest in ETH is rebounding strongly.
3. Hong Kong market: Hong Kong spot Bitcoin ETFs recorded net inflows of 44.2 BTC, while spot Ethereum ETFs saw net outflows of 483.67 ETH, suggesting some divergence between Eastern and Western capital in asset preference.

2. Morgan Stanley’s catalyst effect and the rise of multi-asset ETFs

Competition for capital inside Wall Street is intensifying rapidly:

1. Morgan Stanley’s MSBT gains momentum: after just 6 trading days, MSBT recorded a $19.3 million single-day inflow and cumulative net inflows of $103 million, surpassing the legacy WBTC fund launched back in January. With its ultra-low 0.14% fee, price competition among institutional managers is accelerating the entry of traditional wealth-management capital.
2. Horizontal expansion across the ETF track: crypto ETFs are now evolving from single-asset products into more diversified, yield-capable vehicles. Crypto market maker GSR has launched the first actively managed multi-asset crypto ETF in the U.S. with staking functionality, the GSR Crypto Core3 ETF (ticker: BESO), covering BTC, ETH, and SOL. Goldman Sachs has formally filed for a Bitcoin Premium Income ETF, while Bitwise’s spot Avalanche ETF (BAVA) reached $400,000 in trading volume within its first 90 minutes. These developments show that Wall Street is moving rapidly toward broader and more complex crypto financial product structures.

IV. SunX Trading Strategy Guide: The Stable Choice for Safeway and Saferich

Overall, the market is now in a deep game of improving FOMC-driven macro expectations + forced support from Wall Street capital versus frequent native on-chain crises. With BTC breaking above $81,000 and ETH stabilizing near $2,360, the trend of capital concentrating into core assets has become increasingly irreversible.

For SunX professional traders and high-net-worth users, this week’s core strategy should continue to follow the Safeway and Saferich principles of risk control and stable yield generation:

1. Return to safer infrastructure and avoid on-chain risk

Before the DeFi lending trust crisis is fully resolved, users are advised to significantly reduce interaction with high-leverage on-chain protocols. Consider moving assets back to the official SunX platform, which offers 100% Proof of Reserves, to better secure underlying assets.

2. Navigate the Futures market and make use of the “10% Risk Ratio” moat

In extreme breakout conditions, both long and short liquidation-driven wick moves are likely to occur frequently. SunX’s proprietary Fixed 10% Risk Ratio Model is designed to provide the widest possible risk buffer under extreme volatility. Traders may consider gradually building long Futures exposure in core assets near key support zones, while maintaining strict stop-loss discipline to capture the rich PNL from right-side breakout opportunities.

3. Use Earn and copy trading for passive growth

In highly volatile rotational conditions, trading friction for ordinary investors can become severe. Users may consider moving temporarily idle assets into a SunX Earn account to generate stable annualized passive returns, or using the Copy Trading Plaza for Everyone to screen higher-quality traders and follow them with one click, creating a more efficient Saferich path toward wealth accumulation.

The only real rule for surviving bull and bear cycles is long-term conviction in quality assets combined with strict risk management discipline. Follow the SunX Research Institute each week to filter out noise and focus on the market’s most important global Alpha opportunities.