Market Reactions: Analysts Highlight 'Crowd FUD' as Buy Signal for Bitcoin
A new analysis reveals that traders may be capitalizing on emotional market behaviors sparked by political news, particularly emphasizing Bitcoin's price movements in response to recent tariffs.
Emotional Trading and Market Movements
Analyst Brian Q from Santiment highlighted that emotional trading influenced by political developments is increasingly shaping short-term market dynamics.
“Smart traders” reportedly increased their Bitcoin and altcoin purchases last week as retail investors reacted emotionally to the announcement of a 100% tariff from US President Trump against China.
Retail investors often allow their emotions to sway decisions, leading to price fluctuations that move contrary to market trends. In a recent blog post, Brian Q stated that the market fell sharply after President Trump’s tariff announcements, marking it as one of several instances that triggered intense crowd fear this year.
Other significant events this year included tariffs announced in April and geopolitical tensions in the Middle East during June.
“During the panic, smart traders took the opportunity to buy more, staying ahead of the market trends” - Brian Q said.
Market Overview
Image Source: Santiment
Pattern of Retail Investors
Despite market fluctuations, retail investors typically rebound quickly once they realize their fears were overstated. During the recent wave of panic surrounding political news, data showed that discussions about Trump’s trade policies gained momentum among crypto users, pushing retail sentiment to its lowest levels of negativity for the year.
The sell-off last Friday affected the entire market, but there was a noticeable recovery once Trump indicated a misunderstanding about the tariffs.
“This pattern has become a norm in 2025. Emotions drive retail out, but they always return after realizing the hype was unfounded.”
The current Crypto Fear & Greed Index reflected persistent fear within the market, maintaining a score of 38 for a consecutive day. Even though Bitcoin is showing some recovery signals, the index indicates a risk-averse environment amidst lingering market trepidation.
For more on market sentiment and related insights, read the full analysis.
Related: XRP Sees Highest ‘Retail FUD’ Since Trump Tariffs: Is a Major Sell-off Next?
