Recently, I've seen everyone interpret large on-chain transfers and hot/cold wallet movements on exchanges as "smart money," chasing after these signals.

Honestly, I can't quite stay calm about it...
To put it simply, these are like climate data: they can indicate the wind direction, but don't tell you which window in your house will be blown open.

On the boundary between privacy and compliance, I think ordinary users shouldn't fantasize about being "completely anonymous," nor should they see "full transparency" as natural justice.
On-chain records are public, and your address activity can be easily pieced together, especially once linked to exchanges or fiat on/off ramps.
Cutting off all connections completely is quite difficult.
Compliance won't immediately treat everyone as a criminal, but it will be more like a smog warning—usually you don't notice, but once investigated, you'll find your entire history is exposed.

My own expectation is: the records that should be kept can eventually be reconstructed, so don't rely on "privacy" as a lucky shield;
at the same time, don't give up basic on-chain hygiene just because you're afraid.
Anyway, the term "smart money" is just for listening