# When The Market Flips: Reading Oversold & Overbought Signals Like A Pro

Ever notice how some coins crash hard then bounce back just as fast? Or pump crazily then dump the next day? That's oversold/overbought playing out in real-time.

**Here's the deal:**

**Oversold** = Price got crushed below what it's actually worth. Usually happens after panic selling or bad news. When RSI dips below 30 (or Stochastic below 20), it's screaming "bottom forming, watch for reversal."

**Overbought** = Price went parabolic above fair value. FOMO buyers piling in everywhere. When RSI shoots above 70 (or Stochastic above 80), it's a yellow flag that profit-taking might be coming.

But—and this is crucial—don't trade these signals solo. A low RSI doesn't mean instant moon. You need confluence: check the chart structure, volume profile, on-chain metrics, and yeah, actual news (remember last month's SEC drama? That fundamental pressure nuked the bounce).

The real edge? Use RSI + Stochastic + support/resistance levels together. That's when you spot the actual reversals instead of getting faked out.