Definition ∞ Oversold RSI indicates a technical analysis condition where an asset’s Relative Strength Index falls below a specific threshold, typically 30. This suggests that the asset has experienced significant selling pressure and its price decline may be excessive. Traders often interpret an oversold RSI as a potential signal for a price reversal or a short-term rebound. It is a momentum oscillator used to identify potential buying opportunities.
Context ∞ In crypto market analysis, an oversold RSI is a widely observed indicator frequently cited in news reports discussing potential price floors or market recovery. Analysts often combine this metric with other technical indicators to confirm reversal signals. While it suggests a possible bounce, an oversold condition does not guarantee an immediate upward price movement, especially in strong downtrends.
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