How Does the Psychological Concept of “Capitulation” Relate to the End of a Bear Market?

Capitulation is the final, extreme phase of panic selling where even long-term holders give up hope and liquidate their positions at any price. This mass surrender often leads to a spike in volume and a final, sharp price drop.

Paradoxically, this final flush-out of sellers often marks the absolute bottom of the bear market, as only strong hands remain.