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Overbought refers to a situation in which a particular asset, such as a stock or cryptocurrency, has seen a rapid and significant increase in price and is now believed to be trading above its true value. This can occur when there is strong investor optimism and buying pressure, which can push the price up quickly and reach unsupportable levels.

When an asset is overbought, it is typically seen as being at risk of a price correction or reversal.

Technical indicators like the Relative Strength Index (RSI) can be used by traders and investors to detect overbought conditions and modify their trading tactics accordingly.