Capitulation doesn't always mean prices crashing...

[adaseb]

Many are basically saying "Why buy bitcoin at $16K when I can buy at $12K or $10K or $5K... I am waiting for capitulation".

Well you need to keep in mind capitulation isn't always prices crashing. Retail leaving the community counts are capitulation pretty much. Sure back in 2018 we had bitcoin crash down to $3K and that was the bottom.

Now even though we only crashed down to $15.5K. The market sentiment is very negative.


Exchanges are laying staff off due to retail leaving.
So many lending platforms went bankrupt
FTX going bankrupt

Market sentiment is horrible. Look at people getting money stuck on Gemini Earn, even if they get it back. Most will withdraw from the exchange into their bank account and go and trade stocks instead after all the fear that the event created.

Another issue is liquidity. Back in the day you could open a $1M long or short on Bitcoin or Ethereum and price didn't move by much. Now its very difficult opening a position this large without moving the markets. Liquidity is drying up. Look at all the spikes on all the charts.

If we crab around $15-17K for the next 3-9 months, then I will say this is the cycle low.

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[lionheart78]

As a reaction to your title, capitulation did mean crashing because it is the point where resistance gives in to the pressure or demand.  Just like in a trading market.  When the support (resistance to price crash) gave in and removed, the price will automatically crash to the next support level.  So Bitcoin capitulation refers to the state of Bitcoin where there is a strong selling activity, where investors give up their positions and sell their holdings as quickly as possible. [1]

There may be many factors that affect these investors to give up their position and sell that trigger this capitulation, and some of the examples are given by you @OP.



[1] https://academy.binance.com/en/glossary/capitulation

[Tytanowy Janusz]

Another issue is liquidity. Back in the day you could open a $1M long or short on Bitcoin or Ethereum and price didn't move by much. Now its very difficult opening a position this large without moving the markets. Liquidity is drying up. Look at all the spikes on all the charts.

You can hedge 1 mln $ worth bitcoin on binance futures moving price by not more than 1$. Than slowly move position to spot by selling on futures and buying on spot (you can do it slowly, using moments when BTC spot price is lower than BTC futures). That way you can instantly have exposure to price change of BTC without moving price by opening big positions (but its more like a tip for 100 mln $ trade). Futures liquidity is much bigger than spot.
But even on binance spot you can buy 10 mil $ worth BTC moving price by 0.1-0.5% - its less than trading fees on some exchanges.

But yea. I agree that now is the best time to load a bag. Maybe not balls dip but at least 50% of crypto investment budget.

As a reaction to your title, capitulation did mean crashing because it is the point where resistance gives in to the pressure or demand.  Just like in a trading market.  When the support (resistance to price crash) gave in and removed, the price will automatically crash to the next support level.  So Bitcoin capitulation refers to the state of Bitcoin where there is a strong selling activity, where investors give up their positions and sell their holdings as quickly as possible. [1]

There may be many factors that affect these investors to give up their position and sell that trigger this capitulation, and some of the examples are given by you @OP.

We just hit new low breaking support at 18k. So yea. It can be called capitulation.

[STT]

Capitulation is forced selling I guess, its an alignment of common interests and a forced sell to that asset that is most often paying a dollar account like taxes.  Taxes counts as a possible sell event in the calendar year as everyone has a certain date in common where they might sell or cash out an asset to realize any profits.   Usually capitulation happens at the bottom of a market price because the sale occurs even when its not required so afterwards that price is incorrectly too low and it allows many to buy in and keep hold of that position with some confidence.  Its ironic like short positions must eventually end in a buy when closed.
    I think we already drifted down the majority of the price so I agree its not always sudden, mostly we've been slow down with often sideways moves.