Capitulation

Capitulation means surrendering or giving up in both the cryptocurrency world and the financial world. Let’s say a stock you own is down 10%. You can wait and hope the stock starts to rise, or you can sell the stock and realize the loss. If the majority of investors decide to wait, the stock price will remain relatively stable.

However, if the majority of investors decide to capitulate and give up the stock, there will be a sharp drop in price.

This is a situation that can occur in all stock market transactions and is called a capitulation.

Capitulation in Cryptocurrency

Capitulation in cryptocurrencies occurs when the BTC price of smaller, non-industrial mining operations drops and mining machines are technologically outdated, meaning that miners are back to where they started.

In short, capitulation happens when BTC mining stops being profitable. When miners sell their assets and shut down their platforms, they can accelerate the bear market.

Example of Capitulation in Cryptocurrency

In January 2015, investors panicked and sold their assets, fearing greater losses. The capitulation took place on January 15, 2015. In a short time, there was a huge increase and rise in sales, and the price of BTC fell by about 38% in 2 days.

In this example, BTC bottomed out at $167, a drop of 85.5% from 2013 highs (around $1153). As a result, the end of capitulation marked the beginning of a bull market. The next day was as strong an increase as the previous drop and recorded a 38% increase in one day.

Understand cryptocurrency market in terms of bear and bull seasons better.