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Oversold Definition

Oversold describes a condition where an asset's price has fallen sharply and may be due for a bounce or stabilization.

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What is Oversold?

Oversold conditions are commonly identified using momentum indicators such as the RSI.

As with overbought conditions, an asset can remain oversold for some time during a strong downtrend.

Example of Oversold

An RSI reading of 20 following a sharp sell-off may suggest oversold conditions.

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