When you're on the verge of doing something awesome but back out at the last second or fail to accomplish your objectives due to cowardice.
Whether it's gaining a sizable lead during a Street Fighter match but ultimately losing or posting an inflamatory response on the forum then deleting it are two common examples of how to bottle it.
1: I'm flipping this water bottle!
1: *flips water bottle*
2: *swats water bottle from air*
1: Did you just commit water bottle rape!?
2: Yes. Yes I did.
A bottle of alcohol which is usually very cheap (Imperial Fortified Wine 750mL 20% alc $9.45) and is usually consumed by street people; who had gone and collected enough empty cans and bottles all day just to afford.