The ID token has recently played out a typical surge followed by a pullback scenario — soaring over 28% within 24 hours before quickly retracing, as the driving forces behind the rally gradually weaken. How should we interpret this market movement?

From a technical perspective, the current situation is somewhat polarized. On one hand, the 7-day, 25-day, and 99-day exponential moving averages (EMAs) remain in a bullish alignment, with short-term averages firmly above long-term averages, indicating that upward momentum has not fully dissipated. On the other hand, the MACD has crossed below the signal line, with the histogram turning negative, and the Relative Strength Index (RSI) has reached an extremely overbought zone — all signs suggest that selling pressure and correction risks are building up.

Changes in market liquidity are worth noting. After peaking at $0.0949, trading volume has started to decline. Most importantly, recent fund flow data shows that the net inflow has turned negative, indicating that buying interest is weakening while selling pressure is increasing.

But don’t be too pessimistic. Concepts like Web3 identity and account abstraction have recently regained popularity, boosting market attention; simultaneously, U.S. inflation has fallen to 1.88%, increasing the likelihood of a rate cut by the central bank. This environment is actually favorable for risk assets.

Overall, the ID token is at a critical crossroads — short-term technical signals do indicate overheating, but macroeconomic conditions and market sentiment still provide support. The key now is whether it can hold its crucial support levels.