US stocks plummet, dragging down the cryptocurrency market! Bitcoin and Ethereum collectively decline, facing three major headwinds:

1. Cooling expectations for Fed rate cuts: Williams stated a strict control on inflation, with market expectations for rate cuts this year fading, predicting only four cuts before 2026. The strengthening dollar combined with capital outflows has led to Bitcoin and Ethereum dropping over 1%.

2. Trump's tax reform bombshell: The bill is expected to increase the deficit by $3.8 trillion over the next decade, heightening market concerns over a debt crisis. Goldman Sachs warns that the expanding deficit could push up US Treasury yields, with capital moving from the crypto market to traditional markets.

3. Escalation of US-EU tariff disputes: Trump threatens to impose a 50% tariff on the EU, with negotiations extended until July 9. The intensifying trade friction adds to global economic uncertainty, putting pressure on risk assets, with Bitcoin potentially testing the critical support level of $105,000 in the short term.

Operational reminders:

• Short-term: If Bitcoin falls below $105,000, it may trigger programmatic selling, targeting a lower level of $102,000;

• Long-term: Institutions predict the S&P 500 could drop 10% by the end of 2025, and cryptocurrencies, as high-volatility assets, should be wary of systemic risks;

• Hedging: Allocating to gold ETFs (like GLD) can hedge against tariff and inflation pressures, or shifting to stablecoins like USDT.

Risk reminder: Pay attention to the options expiration on May 31 and the Fed's interest rate meeting in June. If expectations for rate cuts cool further, the crypto market could face larger adjustments. Click to follow for real-time market updates, and let’s discuss in the comments whether you think Bitcoin will drop below $100,000? Share with friends to avoid risks!