🥛 PRO | Checking the markets pulse: May 2025 🩺

GM, this is Milk Road PRO. We help you stay cool when markets are hot, and stay warm when markets freeze over.

Today we’re sharing something new and exciting…our first-ever Monthly Market Pulse report!

Your regular dose of market intelligence that cuts through the noise and focuses on the most important metrics in markets.

Basically we’re summarizing what we’ve seen over the last month and how it should impact your investment portfolio.

Why are we creating this? Simple:

1. Information overload is real — Between Twitter (or X), Discord, Telegram, and 100+ crypto news sites, you're drowning in data but starving for insights

2. Markets move fast — What mattered last quarter could be ancient history now

3. You asked for it — Many of you wanted a regular, data-driven snapshot of where we stand on markets

So on the first Saturday of every month, we'll deliver this comprehensive market analysis with the top charts, metrics, and insights that matter most. Think of it as your monthly market health check-up.

And at the end of this report, we’ll share how we’re allocating our monthly $1,000 DCA injection into the PRO portfolio.

What's different about the Market Pulse?

• It's data-driven (no vibes-based analysis)

• It's actionable (including our own $1,000 monthly allocation to the PRO portfolio)

• It's consistent (same key metrics tracked over time)

• It's comprehensive (macro trends + on-chain data + sentiment + flows)

Oh and even better, the PRO team recorded a 1-hour internal research meeting discussing the details of this report and our investment framework based on the findings. PRO members can watch it here.

Ok, let's not waste any more time and get right into it! 👇

THE BUSINESS CYCLE

First we have to look at the business cycle, as it is the foundation of how we understand the trend and direction of markets. If you’re new here, learn more about how the business cycle impacts crypto markets here.

Right now, the ISM (business cycle) has been stuck in sideways chop for an unusually long 30 months, primarily due to extremely tight global financial conditions. 

We're seeing these conditions finally start to loosen (think $USD and oil dropping), which historically sets the stage for a bull run in crypto.

But we’ve still got a massive geopolitical wildcard with the ongoing US-China trade war which is slowing growth and once again holding back the ISM from rising. Until there's a clear resolution, ideally tariffs being reduced significantly or fully removed, we expect continued uncertainty in markets.

👉 Macro conditions are easing up, but geopolitical tension is still keeping investors cautious. We’re in a weird limbo where financial indicators are promising, but the trade war keeps slamming the brakes on full bullish momentum. The resolution here is the key to the next big crypto move. We think the ISM gets worse (short-term) before it gets better - though very dependent on timing of the trade war resolution.

With macro factors still uncertain, understanding investor sentiment becomes another important data point and of course they are correlated. Market sentiment right now is recovering a bit – but is still quite low as it was during the 8-month chop we had back in 2024. 😱

So let’s look at the number one market sentiment indicator, the Fear and Greed Index. 

Right now, the index is sitting at 55, which is considered neutral. But when it hits extreme levels, either the green or red zone, it often signals a local top or bottom in the market.

It looks like the recent tariff panic with swings into the fear zone in March and April were good buying opportunities. Over the next 12 months, we might see this chart hit the green zone multiple times.

Though again, we need to wait and see what happens on the geopolitical front. 

👉 A fear and greed at 55 gives us little to take from this. We generally want to buy in red and sell in green. However, with a more long-term time horizon (which we have), there is nothing wrong with allocating in the neutral range, so long as the business cycle hasn't topped yet (which we believe it hasn’t!).

MARKET BREADTH

This indicator is actually a favorite one in TradFi. It offers a clear, data-driven view of how the market is actually behaving – not how Twitter thinks it's behaving.

If the financial conditions → liquidity → ISM formula tells us where we're headed, the Market Breadth indicator tells us exactly where we stand today.

✍️ It's a handy tool to help figure out whether or not we're in an uptrending market, regardless of all the macro noise.

This indicator tracks how many stocks in the S&P 500 are trending up versus trending down.

Right now, the Breadth50 is sitting at 0.43, while the Breadth200 is at 0.37. That means 43% of all stocks in the S&P 500 are above their 50-day moving average, and 37% are above their 200-day moving average. 

In simple terms: less than half of stocks are currently showing short-term strength (above the 50-day average), and even fewer are maintaining longer-term bullish momentum (above the 200-day average).

On the other hand, if we look at these same metrics in crypto, it tells a very different story: 75% of alts are above their 50-day moving average, while only 5% are above their 200-day moving average.

👉 These numbers suggest that the stock market is still stuck in "wait and see" mode, while the altcoin market is on a bit of a short-term run. Either crypto is decoupling from stocks or alts are just overheated and need to correct back downwards, my guess is on the latter here. It doesn’t make sense for altcoin season to start yet.

Speaking of altcoin season..

ALTCOIN INDEX

The big question everyone is trying to answer: Will there be a full blown altcoin season? 

The chart below compares the performance of altcoins versus Bitcoin over the past 90 days. 

Only 17% of coins have outperformed Bitcoin during the last 90 days. 

While there was a notable spike in December 2024, we’re still far from extreme levels (above 70%). 

Of course this means there’s plenty of room for alts to run at some point. However, as we’ve mentioned plenty of times, we don’t think that will happen until the ISM sustains above 50.

👉 Until Bitcoin finds firm footing and macro uncertainties clear up, don’t expect altcoin fireworks anytime soon. We think Bitcoin dominance will push higher at least one more time before alts have their moment. Again, all eyes on the ISM. 

Alright, now, let’s take a look at the overall risk appetite of traders by looking at funding rates.