Definition ∞ Buyer Capitulation denotes a market phase where buyers, previously holding positions, succumb to intense selling pressure and liquidate their assets at significantly reduced prices. This event signals a profound loss of optimism and a widespread acceptance of further price declines. It often marks a potential turning point where selling pressure reaches its peak. Such a phase can precede a market bottom.
Context ∞ In cryptocurrency markets, buyer capitulation is often identified through sharp volume spikes during price drops and a broad sentiment of despair. Analysts examine specific price action and investor behavior patterns to detect this phase. Recognizing buyer capitulation assists in understanding market cycle dynamics and potential recovery signals.
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