Definition of «overbought»

"Overbought" is a technical term from financial and cryptocurrency trading slang that describes a situation where an asset's price has risen too quickly and may be due for a correction. It is often used by traders on social media to signal that a specific coin or stock is currently overvalued based on technical indicators like the Relative Strength Index (RSI). The tone is usually analytical or cautionary, aimed at investors who might be considering buying during a peak. In internet finance circles, identifying an 'extreme overbought zone' is a common way to predict an imminent price drop or 'pullback.'