90
What is Overbought?
Overbought is a term used in technical analysis to describe when an asset has been bought aggressively, pushing its price too high and leaving it vulnerable to a sudden sell-off. In some cases, the overbought condition can be seen as an early warning sign of a potential bearish reversal or trend change. An asset that is overbought usually indicates that there are more buyers than sellers in the market—leading to an imbalance between supply and demand which causes prices to rise sharply. This situation can also occur during periods of heightened investor sentiment or enthusiasm for certain assets.
