Definition ∞ Altcoin Capitulation describes a market phase where holders of alternative cryptocurrencies sell their assets in large volumes, often at significant losses. This event typically follows a prolonged downtrend, driven by fear and a loss of confidence in these digital assets. It represents a widespread surrender by market participants, often preceding a market recovery.
Context ∞ News reports often reference altcoin capitulation during severe market downturns, highlighting the intense selling pressure experienced by smaller digital assets. Analysts monitor this period for signs of a potential market floor or a broader rebalancing of capital towards dominant cryptocurrencies. Understanding this phenomenon helps interpret market sentiment during periods of extreme price depreciation.
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