“Savvy investors” capitalized on the opportunity to acquire more Bitcoin and altcoins last week, as retail traders reacted excessively to US President Trump’s 100% tariff on China, according to findings from onchain analytics platform Santiment.
“Retail’s sentiments often predict that the prices of Bitcoin and altcoins are set to move in the opposite direction,” noted Santiment analyst Brian Q in a blog post released on Monday.
The cryptocurrency markets plummeted on Friday when US President Donald Trump announced stringent tariffs against China. Brian Q stated that this event was one of four key dates this year that triggered significant crowd anxiety.
Other instances included an announcement of global tariffs in April, followed by heightened tensions in June between Iran, Israel, and the US. In August, fear and uncertainty dominated discussions as worries grew that the US Federal Reserve might not lower interest rates.
“Intelligent traders took advantage and bought more while the crowd was in panic on each of these occasions,” he remarked.
FUD Drives Retail Away, Yet They Always Return
However, Santiment highlighted that in many scenarios, retail investors often return swiftly once they realize the news was exaggerated, thus benefiting those who bought during the dip.
During the recent wave of FUD, a “growing share of discussions around crypto focused on Trump’s trade policies,” and retail investors exhibited their “most negative sentiment of the year,” according to Brian Q.
The sharp sell-off last Friday caused widespread declines across the market, but traders made their way back after Trump retracted the tariff proposal and US Treasury Secretary Scott Bessent clarified that there had been a misunderstanding, indicating the tariffs “don’t have to happen.”
“This has become an increasingly common trend in 2025. Retail gets rattled by fear, only to reenter the market after realizing the fear-inducing topic was exaggerated or unwarranted.”
“Given that crypto is deeply influenced by sentiment, traders collectively determine which news events should affect their confidence in the market. There is ample evidence to suggest that Trump’s tariffs have immediate effects on reversals whenever new updates arise,” noted Brian Q.
“Emotional trading linked to political news is increasingly shaping short-term market trends, arguably more than we have observed in crypto’s 17+ year history.”
A survey by exchange Kraken, conducted in December 2024, echoes this narrative, revealing that 81% of respondents cited fear, uncertainty, and doubt (FUD) as their primary motivation for investing, with 63% admitting that emotional decisions negatively impacted their portfolios.
Fear and Greed Index Remains in the ‘Fear’ Zone
While Bitcoin (BTC) appears to be showing signs of recovery, the Crypto Fear & Greed Index, which measures overall market sentiment on a scale from 0 to 100, has returned a “fear” rating of 38 for the second consecutive day.
Related: XRP Experiences Highest ‘Retail FUD’ Since Trump Tariffs: Is a Major Sell-Off on the Horizon?
On Sunday, the score plummeted to 24, marking its lowest point since April during the market turmoil and sell-off. The previous week, the index maintained an average rating of 70, well within the “Greed” range.
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