Chainlink sinks below $11 after 22% crash – can LINK bulls protect this critical support zone?
Chainlink’s native token has come under heavy selling pressure, sliding more than 22% in the final days of January 2026 and finally losing its grip on a key multi‑month support band. The drop has rattled sentiment and raised doubts about how much fuel is left in LINK’s uptrend that has been building since late 2025.
The decline pushed price cleanly below the $10.6–$11.75 area, a region that had repeatedly acted as a launchpad for bullish attempts since mid‑November 2025. This same zone also coincided with important Fibonacci retracement levels of the previous leg up, which made it a technically significant area for both traders and longer‑term holders.
The breakdown did not occur in isolation. It came while the broader crypto market was under stress, with Bitcoin sliding under $85,000 and risk appetite across altcoins fading. As usually happens in such conditions, capital rotated away from speculative assets, magnifying the downside in names like Chainlink.
One of the more striking signals accompanying the move was the behavior of the Relative Strength Index (RSI). On higher timeframes, LINK’s RSI fell to levels not seen since 2022, highlighting how intense the current bout of selling has been. Such extreme RSI readings often indicate oversold conditions, but they can also accompany the early stages of deeper bear phases if buyers do not step in with conviction.
Despite the sharp price deterioration, derivatives and order‑book data pointed to an interesting countertrend force: taker buying remained active. According to CryptoQuant metrics, aggressive buy orders continued to dominate, echoing a pattern seen during LINK’s abrupt slide to around $13 in November 2025. That earlier episode also showed persistent taker buy dominance even as price sank, a sign that some participants—especially larger or more sophisticated ones—were prepared to absorb supply on the way down.
This persistent buying interest has often been interpreted as a reflection of how institutional and professional traders view Chainlink’s long‑term role. With its oracle network recognized as core infrastructure for many blockchain applications, dips are increasingly treated by these players as opportunities rather than reasons to abandon the asset. As a result, accumulation has tended to pick up precisely when retail sentiment weakens the most.
On the liquidity side, data from liquidation heatmaps added another piece to the puzzle. Dense clusters of liquidity built up between $12 and $13 during the late‑January slump. Price interacted with this region multiple times, triggering liquidations and forced orders, before finally stabilizing near the lower boundary of the band. This behavior suggests that the $12–$13 pocket remains a magnet for liquidity and could again become a battleground if LINK attempts a recovery bounce.
From a tactical standpoint, the market is now watching whether LINK can reclaim the $11 handle. A decisive move back above this level would not only put price back into the former support range but could also trigger short covering. Traders who sold breakdowns below $11 would be pressured to buy back their positions, potentially accelerating a move toward the $12–$13 zone where liquidity is thickest.
Until such a reclaim occurs, however, sellers continue to hold the upper hand. The structure on many timeframes has shifted from a stable uptrend with shallow pullbacks to a more vulnerable pattern where lower highs and broken supports become the norm. Bulls now face the challenge of showing that this was a violent but ultimately corrective flush, not the start of a prolonged downtrend.
On‑chain data from Glassnode provided another crucial angle: the total supply of LINK currently sitting at a loss has surged to around 400 million tokens. This means a large share of holders bought their coins at higher prices and are now underwater. Historically, such spikes in “supply in loss” have coincided with emotional extremes in the market—either near capitulation lows or at least significant local bottoms.
A similar pattern was visible during the 2022 bear market. Back then, a pronounced rise in the total supply of LINK held at a loss preceded a powerful recovery period. While history never repeats exactly, it often rhymes: when too many participants are in pain simultaneously, the market tends to exhaust selling pressure, creating the conditions for a relief rally or even the start of a new uptrend.
That said, it is important to recognize that a high percentage of supply in loss can persist for some time in deeper bear phases. The signal becomes more meaningful when combined with other indicators, such as an oversold RSI, resilient taker buy flows, and the appearance of strong support zones where price stabilizes and volume surges. In Chainlink’s current case, many of these elements are starting to align, hinting that the downside may be nearing a critical inflection point.
From a fundamental perspective, Chainlink’s role within the broader crypto ecosystem remains a key pillar of the bullish argument. As the dominant decentralized oracle provider, it connects blockchains and smart contracts with real‑world data, powering use cases in DeFi, gaming, insurance, and beyond. This utility has historically underpinned investor confidence, especially during macro or market‑wide downturns, where infrastructure‑type projects tend to weather volatility better than purely speculative tokens.
For traders, the key zone to watch in the short term stretches roughly from $10.6 back up to $11.75. This former support range is now acting as resistance. If bulls can push price back into this band and hold it, it would signal that the recent breakdown was a liquidity sweep rather than a decisive trend reversal. Failing that, the market may probe deeper for a more solid demand area below current prices, potentially triggering another wave of forced selling before a more durable bottom forms.
Risk‑conscious participants will likely focus on several technical and on‑chain checkpoints:
– Whether RSI begins to climb out of oversold territory with price making higher lows
– If taker buy dominance remains strong or begins to fade
– How quickly the supply in loss metric stabilizes or rolls over
– The behavior of price when it retests the $11–$12 region from below
A constructive combination of these signals—especially a reclaim of $11 accompanied by rising volume and a slowdown in realized losses—would strengthen the case for a rebound toward $13 and potentially higher.
Longer‑term investors may view the current volatility differently from short‑term traders. For them, corrections of 20–30% within a broader uptrend are not unusual, particularly in crypto. They often use such drawdowns to scale into positions over time rather than attempting to pinpoint the exact bottom. The presence of institutional accumulation during past dips, as highlighted by taker buy activity, supports the thesis that strategic capital continues to build exposure on weakness.
Still, any bullish scenario depends on price eventually stabilizing and forming a base. If Chainlink fails to attract fresh demand and continues to print lower lows, on‑chain stress could intensify as more holders fall into loss. In that case, what currently looks like potential capitulation might instead evolve into the early stages of a larger downcycle. Monitoring how quickly price responds around the current levels will therefore be crucial over the coming weeks.
In summary, Chainlink’s drop below $11 has undeniably damaged its short‑term technical picture, but it has also created conditions often associated with medium‑term bottoms: oversold momentum, a large share of supply in loss, sticky liquidity pockets above price, and evidence of continued buying from more sophisticated market participants. Whether LINK bulls can convert these ingredients into a sustainable reversal depends largely on their ability to reclaim the $11 zone and defend it as support once again.
Disclaimer:
This text is for informational purposes only and should not be taken as financial or investment advice. Trading, buying, or selling cryptocurrencies involves a high level of risk, and every reader should conduct their own research and carefully assess their risk tolerance before making any investment decisions.