Chainlink experienced a significant 22% decline in the closing days of January 2026, raising concerns about the sustainability of its previously established uptrend. This downturn decisively broke through a crucial support range of $10.6 to $11.75, which had remained intact since mid-November 2025, aligning with important Fibonacci Retracement levels that many traders monitor closely.
The sell-off was marked by a notable drop in Chainlink’s Relative Strength Index (RSI), which fell to its lowest point since 2022, indicating an oversold condition. This price movement coincided with a broader market downturn, as Bitcoin slid below the $85,000 mark, leading to increased risk-averse sentiment among investors in altcoins, including Chainlink.
Despite the sharp decline, market participants are left questioning whether this could represent a capitulation phase or the beginning of a more profound correction. Interestingly, data from CryptoQuant indicated that taker buying remained robust even in the face of Chainlink’s price drop to $13 in November 2025. The elevated Taker Buy Dominant metric underscored persistent buying interest, suggesting that institutional investors consider LINK to be undervalued, prompting continued accumulation despite unfavorable market conditions.
Additionally, during the late-January sell-off, CoinGlass Liquidation Heatmaps revealed significant liquidity clusters between $12 and $13. The price repeatedly tested this area before stabilizing towards the lower end of the range, indicating that buyers were beginning to step in. A reclaim above $11 could potentially attract further liquidity-seeking flows and incite short-covering, clearing a path toward the $13 mark; however, sellers currently retain the upper hand in dictating the overall trend.
Analysts from Glassnode reported a dramatic increase in the total supply of LINK held at a loss, now nearing 400 million tokens. This surge signifies that a substantial portion of LINK holders find themselves underwater, raising speculation that such spikes could signal upcoming market bottoms and subsequent recoveries. Historical data suggests a correlation between similar increases and favorable price rebounds, as observed during the market downturn of 2022.
With Chainlink’s critical role as an infrastructure component within the blockchain ecosystem, these observations might indicate a potential reversal could be on the horizon. While the support zone has been breached, factors such as sustained buying activity and historical patterns of recovery lead some analysts to remain cautiously optimistic about LINK’s future trajectory.
