Definition ∞ Short term capitulation refers to a rapid and intense period of selling by short-term holders of a digital asset, typically in response to sudden price drops or negative news. This event is characterized by a quick surge in realized losses among recent buyers, leading to sharp, but often brief, price declines. It represents a quick flushing out of less convicted market participants.
Context ∞ Cryptocurrency news reports on short term capitulation to explain sudden, steep price drops that are usually followed by a rebound or stabilization. This event provides context for understanding why recent buyers might be exiting the market quickly, often due to fear or margin calls. Identifying short term capitulation can help differentiate between a minor market shakeout and a more prolonged bear market phase.
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