Definition ∞ Market capitulation describes a period of intense, widespread selling by investors who abandon their positions due to extreme fear or significant unrealized losses. This event typically marks the final, most severe stage of a bear market, characterized by sharp price declines and high trading volume as participants exit. It often precedes a market bottom, as the remaining holders are those with strong conviction.
Context ∞ Cryptocurrency news often highlights market capitulation as a pivotal moment in a bear cycle, indicating a potential cleansing of weak hands. On-chain data showing large realized losses or a significant transfer of assets from short-term to long-term holders can confirm this event. Understanding capitulation provides critical context for interpreting extreme market volatility and identifying the potential onset of an accumulation phase.
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