The point at which investors give up hope and sell their assets in large numbers, often at a significant loss.
Capitulation marks the final stage of a prolonged bear market, where widespread panic selling occurs as investors abandon their positions, unable to tolerate further losses. This mass exodus of sellers exhausts the available supply at lower prices, often creating a strong bottom and setting the stage for a subsequent price recovery. Identifying capitulation can be a sign that the market has reached its lowest point and is poised for a bullish reversal.