Definition ∞ A buyer capitulation signal indicates a market phase where investors holding digital assets liquidate their positions in large volumes, often at substantial losses, driven by extreme fear. This intense selling pressure suggests that remaining purchasers have lost confidence and are exiting the market. Such events typically mark a potential low point in a downtrend, signaling an exhaustion of sellers. It often precedes a market rebound.
Context ∞ Observing a buyer capitulation signal in cryptocurrency markets is a key event for market analysts, often suggesting that a significant market bottom might be forming. News reports frequently discuss these signals during severe market corrections, providing context for the emotional state of market participants. This indicator helps gauge the potential for a subsequent recovery in asset prices.
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