What is crypto market capitulation?

Crypto market capitulation refers to a phase of panic selling and declining prices. During this period, investors exit their positions by selling as quickly as possible. This causes prices to drop lower and lower. Capitulation eventually comes to an end when the bulls have no more assets to sell. This results in a price bottom.

What is 'capitulation'?

What is 'Capitulation'. Capitulation can happen at any time, but typically happens during high volume trading and extended declines for securities. A market correction or bear market often leads investors to capitulate or panic sell. The term is a derived from a military term which refers to surrender.

What is stock market capitulation?

Capitulation is a scenario where people give up and run away, fearing the foreseeable outcome. The term is commonly used in the context of wars and politics—one nation surrenders to another—soldiers flee in retreat. Stock market capitulation, too, is similar.

How do technical analysts identify capitulation?

Technical analysts can visually identify capitulation using candlestick charts. Hammer candles often form at the end of a selling frenzy when the lowest price is made, as capitulation sets in and signals a price bottom followed by a reversal bounce on heavy volume. Traders who wanted to sell their positions have done so as panic reached a climax.