Growth eventually stops, followed by a reversal. The main task of a trader is to correctly determine the moment when it will happen, as not every stop indicates an imminent reversal. Indicators that show that an instrument is in an overbought state - meaning that most traders who intended to buy it have already done so, and are now looking for a moment to sell can help with this.

Among the indicators that help understand if an asset is overbought are Bollinger Bands, Stochastic, Chande Momentum, and others. The Relative Strength Index (RSI) is very often used because it's simple and convenient: there are two lines - upper and lower. If the RSI graph crosses the upper line from bottom to top, it means the asset is entering an overbought state. This doesn't necessarily mean that its price will soon fall, but sooner or later it should happen. If instead, the price continues to rise and reaches a new local maximum, while the RSI level lags behind and doesn't establish the same local maximum, it means a bearish divergence is occurring - which in most cases serves as a signal for a significant price drop in the near future. An increase in sales volumes can also indicate this.

In any case, when an instrument is overbought, one should be cautious not to lose profits, especially when it comes to cryptocurrency, which can crash by tens of percent in a matter of minutes.