Santiment analyst Brian Q said emotional trading tied to political news is dominating short-term market behavior more than ever.
“Smart traders” picked up more Bitcoin and altcoins last week as retail investors overreacted to US President Trump’s 100% tariff against China, according to onchain analytics platform Santiment.
“Retail’s emotions often dictate that Bitcoin’s and altcoins’ prices are about to do the opposite,” Santiment analyst Brian Q said in a blog post on Monday.
The crypto markets crashed on Friday as US President Donald Trump announced stiff tariffs against China. Brian Q said the event was one of four dates in particular this year that drove peak crowd fear.
Other moments included one in April when the first round of global tariffs was announced, then again in June during tensions in the Middle East between Iran, Israel and the US. FUD also dominated in August, as concerns arose that the US Federal Reserve might not cut rates.
“Smart traders scooped up more while the crowd was in panic on each of these dates,” he said.
However, Santiment noted that in many of these cases, retail investors would quickly return once they realized the news was overblown, benefiting the dip buyers.
During the latest bout of FUD, a “growing share of crypto discussions centered on Trump’s trade stance,” and retail showed its “highest negativity level all year,” Brian Q said.
The steep sell-off last Friday saw bleeding across the market, but investors came back after Trump walked back the tariff plan and US Treasury Secretary Scott Bessent said there had been a misunderstanding and 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”.
“Since crypto is sentiment-driven, traders collectively decide what news should impact their confidence in markets. And there is enough evidence to show that Trump’s tariffs have instant impacts on reversals whenever a new development unfolds,” Brian Q said.
“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 survey of 1,248 crypto users by exchange Kraken in December 2024 tells a similar story.
It found that 81% of respondents were motivated by fear, uncertainty and doubt (FUD) when investing, and 63% also admitted that emotional decisions had negatively affected their portfolios.
Bitcoin (BTC) may have shown signs of recovery, but the Crypto Fear & Greed Index, which gauges overall market sentiment on a scale of 0 to 100, has returned another “fear” rating with a score of 38 for the second consecutive day.
Related: XRP sees highest ‘retail FUD’ since Trump tariffs: Is a major sell-off next?
On Sunday, the score dropped to 24, its lowest level since April, amid the market panic and sell-off. Last week, the index had an average rating of 70, well within “Greed” territory.
