Definition ∞ Deeply Oversold describes a market condition where an asset’s price has fallen significantly and rapidly, reaching levels that technical indicators suggest are below its intrinsic value. This state indicates strong selling pressure has pushed the price to an extreme low, often implying a potential for a price rebound. It suggests that most market participants who wished to sell have already completed their sales.
Context ∞ The state of an asset being deeply oversold often generates considerable interest among contrarian investors seeking entry points. A key debate involves distinguishing between a temporary oversold condition and a sustained downtrend caused by fundamental issues. Observing volume patterns and broader market sentiment is crucial for assessing the likelihood of a price reversal from this position.
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