When Bitcoin prices fall sharply and remain at lower levels for an extended period of time, it’s known as capitulation. Capitulation occurs when investors give up on trying to make money from a falling market and instead sell their assets to avoid further losses.
This selling can cause prices to fall even further, leading to a self-reinforcing cycle of capitulation.
Bitcoin capitulation is often associated with a sharp drop in prices followed by a prolonged bear market. In the past, Bitcoin has experienced several periods of capitulation, most notably in 2014 and 2018.
While the term is often used to describe a sudden sell-off, it can also refer to a more gradual decline in prices over time.
Capitulation can be a difficult concept to understand, but it’s an important part of the Bitcoin market cycles. By understanding what capitulation is and how it affects the market, you can be better prepared to make informed investment decisions.