Capitulation is the deliberate decision to sell all or part of your assets at a loss because you no longer feel the price will rise. Capitulation in the classical sense relates to the process of surrendering power; nevertheless, in finance and trading, this term has a somewhat different connotation.
Traditional stock exchange trading, for example, and cryptocurrency trading both carry significant risk. Prices fall and increase, but traders rarely know the direction their investment will take. Given this, the possibility of your investment portfolio losing half of its value should not be dismissed.

Capitulation in financial markets refers to a point when investors give up trying to recover lost value during a sharp market downturn and sell their positions en masse, often at a significant loss. It typically occurs after prolonged market declines, when fear and panic overwhelm rational decision-making. This mass selling can lead to further price drops, marking a potential bottom in the market.

Capitulation is seen as an emotional surrender, where investors lose hope of recovery. Paradoxically, it may also signal the end of a bear market, as once the majority has sold off, buying opportunities arise for contrarian investors. Recognizing capitulation can help traders anticipate a market reversal or navigate high-volatility periods more strategically.