Capitulation

Capitulation refers to a drastic market downturn characterized by a period of strong selling activity, whereby investors might sell their holdings at an unprecedented rate to avoid further financial losses. Capitulation is sometimes referred to as panic selling.

An example of capitulation on a longer time frame in the crypto market is selling that took place after the price of bitcoin (BTC) reached an all-time high (ATH) of $20,000 USD in December of 2017 and subsequently crashed to $6,500 three months later. Shorter capitulations may be followed by an uptrend reversal in value.

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