Bitcoin crowd FUD signals best buying time
Bitcoin crowd FUD signal drives trading sentiment
Santiment analyst Brian Q said emotional trading linked to political headlines now shapes short-term crypto trends more than ever. According to him, “smart traders” increased Bitcoin and altcoin holdings last week while retail investors reacted to US President Trump’s 100% tariff plan against China.
In a blog post, Brian Q noted that retail emotions often indicate when Bitcoin and altcoin prices are about to move in the opposite direction. The crypto market dropped sharply on Friday after Trump’s announcement, one of four major fear-driven events this year.
Other market panic moments came in April with the first global tariffs, in June during the Iran-Israel-US tensions, and in August when the US Federal Reserve hesitated on rate cuts. “Smart traders scooped up more while the crowd was in panic on each of these dates,” Brian Q said.
FUD pushes retail out, but they always come back
Santiment observed that retail investors often return once the news calms, helping dip buyers profit. During the latest wave of fear, crypto discussions increasingly focused on Trump’s trade policies, showing the year’s highest negativity levels.
Markets fell across the board last Friday but quickly recovered after Trump eased the tariff stance and Treasury Secretary Scott Bessent clarified that the tariffs “don’t have to happen.”
“This has become a common pattern in 2025,” Brian Q said. “Retail gets shaken out by fear, then returns once the news proves to be overblown.”
He added that since crypto is sentiment-driven, traders collectively decide what news impacts market confidence. Evidence shows that Trump’s tariff announcements trigger immediate sentiment shifts and reversals.
Emotional trading tied to political events now dominates short-term crypto market behavior more than ever in its 17-year history.
A December 2024 Kraken survey of 1,248 crypto users supported this view. It found 81% of respondents were driven by fear, uncertainty, and doubt (FUD), while 63% said emotional decisions hurt their portfolios.
Fear & Greed Index remains in fear zone
Bitcoin may be showing recovery signs, but the Crypto Fear & Greed Index still signals fear with a score of 38 for the second straight day.
On Sunday, the index fell to 24 – its lowest since April – amid the sharp market sell-off. Just last week, it averaged 70, sitting deep in the “Greed” zone.
