Oversold but Not Capitulation

Definition ∞ “Oversold but not capitulation” describes a market condition where an asset’s price has fallen significantly, indicating a strong bearish trend, but without the widespread, panic-driven selling that marks a market bottom. While technical indicators suggest an oversold state, meaning a potential bounce is due, the absence of extreme volume and desperate selling from all market participants indicates that the final despair phase has not yet occurred. This state suggests a market in distress but not yet at its lowest point.
Context ∞ This phrase is commonly used in cryptocurrency market analysis to characterize periods of significant price decline that lack the definitive characteristics of a market bottom. News reports often debate whether a current market dip represents this condition, with analysts searching for signs of genuine capitulation. The discussion helps investors distinguish between a strong correction and the ultimate despair phase that precedes a new bull market.