Capitulation is the terminal stage of a market collapse, characterized by investors giving up hope and taking losses, causing prices to bottom out. This typically stirs bullish sentiment as it creates opportunities for value investing and marks a technical sign that downside risk is being replaced by upside potential. Market bottoms are confirmable only in hindsight, which introduces an element of speculation.
Upside potential refers to the amount of upward price movement an investor or an analyst expects of a particular stock, bond, or commodity.
