When investors surrender previous gains by selling their positions on a security during periods of market decline. A bear market is often a major contributing factor to capitulation. In theory, many capitulations should signal the end of a bottom, as if many are panic selling, the price should then (after everyone has sold) bounce off the lows or begin a reversal.
We don't know everything about the markets. We're just devoted to learners. Taken from those smarter than ourselves, here's how we define Capitulation.