Capitulation in the cryptocurrency market occurs when optimistic investors recognize defeat and start selling off assets aggressively, leading to significant price drops. Key indicators include increased trading volumes, falling prices, and a loss of trust among major holders. While capitulation can indicate a market bottom, identifying the exact low is challenging, as the process can take months or years. This phenomenon often shifts focus to long-term projects and increases the prevalence of 'old coins' held by patient investors.