Stochastic RSI is an indicator used to assess whether an asset is overbought or oversold. It combines two concepts: the Stochastic Oscillator and the Relative Strength Index (RSI). The Stochastic Oscillator helps identify the momentum of price changes by comparing a specific closing price to a range of prices over a set period. The RSI measures the speed and change of price movements, providing insights into whether an asset may be overbought or oversold. When these two are combined, Stochastic RSI produces values that range from 0 to 1. Values above 0.8 typically signal that an asset may be overbought, while values below 0.2 suggest it may be oversold. Traders often use Stochastic RSI as a supplementary tool, helping to identify possible reversal points. By analyzing these levels, investors can make more informed decisions on when to enter or exit positions.