Bitcoin News Today: Crypto's Fear Paradox: Investor Panic Precedes Price Rebounds

The recent surge in "Fear, Uncertainty, and Doubt" (FUD) among retail investors has emerged as a key contrarian signal for buying Bitcoin, according to on-chain analytics firm Santiment. The firm's analysis of 2025 market data highlights how crowd-driven panic-often triggered by geopolitical events-has historically preceded significant buying opportunities for savvy traders.

Santiment analyst Brian Q noted that four major FUD spikes in 2025 coincided with sharp sell-offs in Bitcoin and altcoins, but these periods also marked optimal entry points for investors. The most recent example occurred in October 2025, when U.S. President Donald Trump announced a 100% tariff on Chinese imports, triggering a 12% plunge in Bitcoin's price to $107,000. During this selloff, over $19 billion in leveraged positions were liquidated, with more than 1.6 million traders affected . Despite the volatility, Santiment emphasized that such events often reflect overblown fears, as retail investors typically return once the news is contextualized FUD and Politics Are Driving Bitcoin in 2025 - Cointelegraph^[1].

The firm's data underscores a recurring pattern: Bitcoin's two largest trading volume spikes in 2025-$84.08 billion in April and $90.90 billion in late 2025-aligned with market bottoms and tops, respectively. The April spike followed Trump's initial tariff announcements, while the late-2025 surge coincided with Bitcoin hitting a record high above $124,000. Santiment described these extremes as contrarian signals, with the former signaling buying opportunities and the latter indicating profit-taking Santiment: Bitcoin’s 2025 Volume Peaks Have Been the Key …^[2].

Market sentiment metrics further validate this dynamic. The Crypto Fear & Greed Index, which gauges overall market sentiment on a 0–100 scale, has consistently trended toward "fear" during FUD-driven selloffs. In late October 2025, the index dropped to 24-the lowest since April 2025-amid panic over Trump's tariffs . Similarly, Santiment's metrics showed a 38% increase in "Loss Sellers" (investors with weak positions) and a 38% rise in profit-taking activity, reflecting a market reset driven by emotional trading Santiment: Bitcoin’s 2025 Volume Peaks Have Been the Key …^[2].

Retail behavior also reinforces the FUD-as-buy-signal thesis. A Kraken survey of 1,248 crypto users in December 2024 found that 81% of respondents were motivated by FUD when making investment decisions, while 63% admitted emotional trading had negatively impacted their portfolios FUD and Politics Are Driving Bitcoin in 2025 - Cointelegraph^[1]. Santiment's Brian Q highlighted that retail investors often overreact to political developments, such as Trump's trade policies, only to return later when the news is deemed less dire. This cycle has become increasingly pronounced in 2025, with political events dominating short-term market behavior more than at any point in crypto's 17+ year history FUD and Politics Are Driving Bitcoin in 2025 - Cointelegraph^[1].

The current market environment appears to favor buyers. While Bitcoin's price stabilized above $110,000 after the October selloff, its dominance rate in the total crypto market cap rose from 57% to over 59% in two weeks, indicating capital is flowing back into the leading asset Crypto Fear & Greed Index | CoinMarketCap^[4]. Santiment and other analysts caution, however, that further downside remains possible if FUD persists. The firm's "Social Volume" indicator, which tracks mentions of "buy the dip," has spiked to a 25-day high, but this could signal more weakness before a true bottom is reached Bitcoin’s ‘Buy the Dip’ Surge May Signal Further Downside, Warns …^[3].

For investors, the key takeaway is to remain disciplined. Santiment advises buying during periods of sustained pessimism, as the crowd's capitulation often precedes price recovery. This approach aligns with historical patterns, where Bitcoin's price has historically reversed after FUD-driven selloffs, rewarding those who acted counter to the crowd's fear.