An overbought market is characterized by massive buying of futures contracts and by a sharp increase in futures prices during a short period of time, generally as a consequence of factors not explained by fundamentals. This occurrence can be interpreted as a sign that the price of the asset is overvalued and that soon its price will decline. The price increase is expected to be followed by a sell-off.
An overbought market is bearish. This is a technical concept not related to the fundamentals of supply and demand.