Capitulation
Mass panic selling — signal of possible market bottom.
Capitulation is a sudden, mass exit of investors from the market in panic — characterized by enormous selling activity and extreme fear.
Capitulation characteristics:
•Sudden, accelerating drop in short period
•Volume significantly above average (panic)
•Fear & Greed Index extreme Fear (0-10)
•"Crypto is dead" media narrative
•Leveraged positions massively liquidated
•SOPR drops deeply below 1 (everyone selling at loss)
Historical capitulation examples:
•March 2020 (COVID) — BTC to $3,800 in a day
•June 2022 (3AC/Luna) — BTC to $17,600
•November 2022 (FTX) — BTC to $15,500
Why capitulation signals a bottom:
•"Weak hands" have exited — sellers exhausted
•Who wanted to sell — sold
•After capitulation, only long-term holders remain
•Logic: when "worst scenario" materializes, no more fear
How to recognize capitulation:
•Extreme fear, not normal drop
•Long wicks down on candlestick (price flash lower)
•Volume explosion on decline
•SOPR < 0.9 continuously
Strategy:
•DCA during capitulation (not "all-in" immediately)
•Don't catch falling knife — wait for recovery signs
•Use stablecoins accumulated in bull market