Capitulation? This Bitcoin Sell-Off Still Isn't as Extreme as 2015's

Further, as bitcoin makes up more than 50 percent of the entire market in terms of total capitalization, it's safe to say the bear market may end when bitcoin bulls refuse to cede more ground.

In order for a true 'bottom' to be found, many figure a "Capitulation" needs to take place, since it is traditionally the last stage of a prolonged bear market.

It's difficult to consider something to have officially capitulated until after it has occurred, but by looking at previous capitulation stages and market bottoms for BTC, there are a few signs traders and investors alike can watch out for that may allude to an official market bottom.

From 2013-2015, BTC experienced a bear market similar to the one occurring now, in which it reached an all-time high of $1,163 in November, 2013 and eventually fell 86 percent to bottom out at $152 in January, 2015.

The price of BTC dropped 30 percent in a single 4-hour candlestick that was backed by its most sell volume in several months - an extreme selling event like this creates a volume climax which tends to be the precursor to a market bottom.

At this point, fear in the market officially met demand and those still interested in BTC considered the $152 price tag too cheap to let it slip any further.

As can be seen below, the market is again experiencing a significant sell-off, but so far has been more gradual than the capitulation experienced in 2015.

This is evident in that no single 4-hour candlestick has recorded more than a 9 percent loss whereas the single "Market bottoming" four-hour candlestick in 2015 recorded a 30 percent loss.

Should be noted, capitulation events do not immediately reverse the long-term trend of a market.

Such extreme selling events are also very rare, so it's unlikely for the exact market conditions of 2015 to be replicated this time around.