||
|---------|
|
[freepik](https://www.freepik.com/free-vector/hand-drawn-bankruptcy-effect-person_7455677.htm#fromView=search&page=1&position=3&uuid=1b68aa9b-0737-4130-ad73-2178b6f3739d)|
|----------|
Hi friends! how are you doing? Welcome to my blog, it's super good to be back in your faces too. I trust you got value from my last post. I bring to you another value packed content one that I believe you would find interesting as usual. In my last post, we explored the concept "Consumers Token Offering", you can check out my blog to read through if you haven't.
Today, we would be looking at **Capitulation** in the crypto world... it's actually a topic I stumble upon but then it caught my interest, I had to take a deeper look to see what it about and of course i was able to gather the things am about to share about this concept.
|**Introduction**|
|---------|
I won't stop saying that before you can become an investor in this space, you have to be knowledgeable and grounded. This space is just so slippery and risky, it takes those with brave heart to stay put and unshaken when the going get tough.
The market operates in cycles, there are phases where the market goes all greenish leaving investors happy with profit and there are other times the market get so bad that you cannot but become fearful for your investment.
People then begin to make decisions they feel is right for them at that moment just to salvage the situation. This then brings us to today's topic, Capitulation.
|**What is Capitulation**|
|----------|
Capitulation is that action taken by a trader to sell all or part of his asset even at a loss because of the current state of the market. The investor at this point is willing to give up even at a loss because of the pessimism and panic that surround the sharp fall of asset price in the market.
||
|---------|
|[freepik](https://www.freepik.com/premium-vector/business-failure-stress_4228705.htm#from_view=detail_alsolike)|
|----------|
At this point, he is not willing to watch the asset fall further. There are many factors that could contribute to the sharp and steady decline in the price of an asset and one of the sad reality of the cause this activities is the whale. It so sad that they could take advantage of little investors because the crypto market is not regulated and as such it's susceptible to manipulation.
This is not the only reason why we witness this events there are other reasons such as news, an unfavourably one at that which brings so much panic and fear which eventually cause most invest to give up their position and close them in losses. This is what we refer to as Capitulation.
|**Why does Capitulation happen?**|
|----------|
This is a very good question. Well the main reason is because of widespread fear and panic in the market. When uncertainty sets in people's emotions suffers some level of imbalance and as such they begin to take decision which usually are not informed.
Some sell off because they can't even imagine the possiblity of making profit from their investments anymore. Sometimes it could require that we wait but you know at this point patience is far from the option an investor has because he is not sure the asset has hit the bottom price where there won't be further decline.
||
|---------|
|[freepik](https://www.freepik.com/premium-vector/man-with-decreasing-chart-vector-illustration_4712510.htm#from_view=detail_alsolike)|
|----------|
Hence the reason why many choose to sell even at a loss. Imagine Mr.A sells off his holdings, Mr.B does the same what do you think Mr.C is likely to do expecially when there is already a widespread of panic in the market. Well he might just want to follow suit just to cut his losses and then the general price of assets decline even further.
Its also important to mention that Capitulation happens in all market but then it's very common in the crypto market and the reason is not far fetched. The crypto market is a very volatile market and highly risky. You can tell Capitulation is ongoing in the market via sharp increase in trading volumn and corresponding sharp drop in price of asset.
|**Bottom Line**|
|---------|
I believe by now we understand what Capitulation and what lead to this activity in the market. I trust you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
-------------
**Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.**
----------
Regards
@lhorgic♥️
-----------
Reference
