Oversold is a subjective term that refers to an asset that has recently traded at a lower price relative to its perceived potential for a short-term price increase or bounce. However, because an oversold price condition can last for a long time, an immediate price increase is not always the result in the short term. Technical indicators are one of the most common methods for identifying oversold or overbought assets by combining data from various metrics such as the relative strength index (RSI), Bollinger Bands, trading volume, and others.
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