After the drastic fall in the prices of cryptos over the last few days, the 2 terms in the title are relevant to the present market situation.

Capitulation is the point when those who have been holding on with the hope that prices will go back up stop hoping. To capitulate is to give up hope of prices going up and so you sell because you expect the price to go down even more.

Would you sell now with hope of buying it back when the price has gone down?

The fact that you have held on so far and have not sold yet means that you have not capitulated yet.

But after the carnage especially yesterday with Luna going down by more than 99% within a day you may be panicked into selling just in case the market goes down more.

Those who spread FUD do it with the hope of inducing panicked selling. Will you be panicked into selling at a time when prices are so very low?

Or you going to be pushed beyond panic selling and give up on the market and so capitulate?

When the market capitulate, so many 👬👫 give up and sell that the volume of selling goes up very high.

The high volumes of the last few days  makes some 👫👬  believe that capitulation has taken place.

It this has happened then this is a good thing because all the weak holders have been shaken out. It means that the market has hit a bottom.

Today is a green day and prices has bounced up.

So has the market capitulated and hit a bottom already?

It may have, but the bounce may be a dead cat bounce.

What do I mean by a dead cat bounce?

A dead cat will not be up and running again. But just before it becomes totally dead or still, its body jerks in death throes which is referred to as the dead cat bounce.

So the bounce today will be short live and will be followed by more red days of falling prices.

What is the current situation?

Has the market capitulated and  hit bottom or is it in a dead cat bounce?

🦋 cannot say for certain. There are too many uncertainties.

War uncertainties, Covid, Rate of inflation, how hawkish will central banks be in raising interest rates, how governments will introduce regulations to curb cryptocurrencies.

What 🦋 know is that current prices are very low compared to just a few months ago and to their all time highs.

Will they go down further. Possibly.

Will more cryptocurrencies go bust and become extinct? Definitely yes.

Will Bitcoin and Ethereum be amongst those who go bust? Very very unlikely.

They may go down more but if you have the holding power to wait for their recovery, so what if they go down more?

Just wait and they will have a lot of room to go up.

🦋 conclusion:

1 ) Do not use leverage, borrow money to buy or buy futures. These increase the risks.

2 ) Stick to spot buying without using leverage

3) If you want to minimise risk stick to Bitcoin and Ethereum as these 2 are highly unlikely to go to zero.

4 ) Buy other cryptocurrencies ONLY IF you know them well and have Done Your Own Research (DYOR) and are confident about them.

5 ) Prices are at such low level that the risk to reward ratio favours buying to wait for recovery (provided you have the holding power)

Rather than 

To sell and hope to buy back (what if the market has bottomed and you sell at the bottom)

A video you may want to see is the one below by a YouTuber, Lark