Definition ∞ Retail capitulation describes a market phase characterized by widespread, panicked selling of digital assets by individual, non-institutional investors, often at a significant loss. This occurs when sustained downward price pressure and negative sentiment overwhelm investor confidence, leading to a surrender of positions. It is typically seen as a final stage in a bear market, where the last remaining weak hands exit their holdings. This event often precedes a market bottom.
Context ∞ Retail capitulation is a frequently discussed concept in cryptocurrency market cycles, particularly during severe downturns. News reports often identify this phase through metrics such as a surge in realized losses on-chain or a dramatic increase in trading volume during sharp price drops. Recognizing retail capitulation can signal a potential turning point, as the market may be clearing out remaining sellers before a recovery. This offers strategic insights.
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