According to on-chain analytics firm Santiment, “smart traders” accumulated more Bitcoin and altcoins last week as retail investors panicked over U.S. President Trump’s 100% tariff on China.
In a blog post published Monday, Santiment analyst Brian Q noted that retail traders’ emotions often signal the opposite of what the market is about to do.
The crypto market tumbled on Friday following Trump’s tariff announcement, which Brian Q identified as one of four key moments this year that triggered peak crowd fear.
Other notable fear-driven events included April’s first wave of global tariffs, June’s Middle East tensions involving Iran, Israel, and the U.S., and August’s worries over the Federal Reserve’s hesitation to cut rates.
“Each time panic set in, smart traders were quietly buying the dip,” Brian Q added.
FUD drives retail away — but they always return
Santiment observed that in most cases, retail investors tend to rush back into the market once they realize the panic was exaggerated — ultimately rewarding those who bought the dip.
During the most recent wave of fear, a surging share of crypto chatter focused on Trump’s trade policies, while retail sentiment hit its most negative level of the year, according to Brian Q.
Last Friday’s sharp sell-off triggered widespread losses across the crypto market, but investors quickly returned after President Trump softened his tariff stance and U.S. Treasury Secretary Scott Bessent clarified that there had been a misunderstanding, noting the tariffs “don’t have to happen.”
“This has become an all too common pattern in 2025. Retail gets shaken out by fear, then jump back in after the fear-inducing topic is confirmed to have been overblown or all for nothing”.
“Because crypto markets are largely driven by sentiment, traders collectively determine which news events influence their confidence,” Brian Q explained. “There’s ample evidence showing that Trump’s tariff announcements often trigger swift market reversals whenever new developments emerge.”
“Emotional trading tied to political news continues to dominate short-term market behavior, arguably more than we have ever seen in crypto’s 17+ year history.”
A December 2024 survey of 1,248 crypto users by exchange Kraken revealed a similar pattern.
According to the findings, 81% of respondents said their investment decisions were influenced by fear, uncertainty, and doubt (FUD), while 63% admitted that emotional trading had hurt their portfolios.
Meanwhile, the Crypto Fear & Greed Index — which measures overall market sentiment on a scale from 0 to 100 — has slipped back into “fear” territory, holding at 38 for the second straight day.
Although Bitcoin (BTC) has shown early signs of recovery, the index fell to 24 on Sunday, its lowest level since April, following the recent panic and sell-off. Just a week earlier, the index averaged 70, firmly in “greed” territory.
