“Savvy traders” acquired more Bitcoin and altcoins last week as retail investors reacted strongly to US President Trump’s 100% tariff on China, as noted by the analytics platform Santiment.
“Retail emotions frequently lead to situations where Bitcoin’s and altcoins’ prices tend to do the opposite,” Santiment analyst Brian Q observed in a blog post on Monday.
The cryptocurrency markets plummeted on Friday after President Donald Trump declared hefty tariffs against China. According to Brian Q, this was one of four specific dates in 2025 that triggered peak crowd anxiety.
Other notable instances included one in April with the announcement of the first round of global tariffs, and again in June during rising tensions in the Middle East involving Iran, Israel, and the US. FUD also prevailed in August amid fears that the US Federal Reserve might not decrease rates.
“Astute traders took advantage of the panic while the crowd was scared on each of these occasions,” he stated.
FUD drives retail out, but they always return
Nevertheless, Santiment observed that in many instances, retail investors tend to quickly return once they realize the news was exaggerated, benefiting those who bought the dips.
During the recent FUD outbreak, a “growing share of crypto discussions revolved around Trump’s trade position,” with retail experiencing its “highest negativity level of the year,” according to Brian Q.
The significant sell-off last Friday saw widespread market losses, but investors returned after Trump retracted the tariff plan and US Treasury Secretary Scott Bessent indicated there had been a misunderstanding, stating that the tariffs “don’t have to happen.”
“This has become a recurring pattern in 2025. Retail gets shaken out by fear, then jumps back in after the fear-inducing topic proves to have been exaggerated or unfounded.”
“Since crypto markets are driven by sentiment, traders collectively determine which news affects their confidence in the markets. There is plenty of evidence suggesting that Trump’s tariffs lead to immediate reversals whenever related developments occur,” Brian Q noted.
“Emotional trading linked to political news continues to significantly influence short-term market behavior, arguably more than ever in crypto’s 17+ years.”
A survey involving 1,248 crypto users conducted by exchange Kraken in December 2024 reflects a similar narrative.
The survey revealed that 81% of respondents were influenced by fear, uncertainty, and doubt (FUD) when making investment decisions, while 63% admitted that emotional choices negatively impacted their portfolios.
Fear and Greed Index shows fear
Although Bitcoin (BTC) may be showing signs of recovery, the Crypto Fear & Greed Index, which assesses overall market sentiment on a scale from 0 to 100, has returned a “fear” rating of 38 for the second consecutive day.
Related: XRP faces highest ‘retail FUD’ since Trump tariffs: Is a major sell-off imminent?
On Sunday, the index fell to 24, its lowest point since April, amid the market panic and sell-off. Last week, the index maintained an average rating of 70, firmly within the “Greed” zone.
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