Chainlink Drops Below $11 After 22% Sell-Off – Can LINK Bulls Protect This Level?

Chainlink has recently experienced a 22% decline at the end of January 2026, raising concerns about the sustainability of its upward trend over the past several months. This significant sell-off has breached the support zone of $10.6–$11.75, which has been a stable range since mid-November 2025, matching with key Fibonacci Retracement levels.

Key Takeaways

Chainlink's price recently dropped by 22%, breaking critical support levels.
Strong buying activity from institutional investors continues despite the price decline.
A liquidity zone between $12 and $13 may determine future price stability.
A surge in LINK held at a loss signals potential market recovery signs.

Chainlink (LINK) Retraces 22%, Breaking Critical Support – More Pain or a Rebound Ahead?

Chainlink Price Chart Source: TradingView

This price drop coincided with Chainlink's Relative Strength Index (RSI) hitting its lowest point since 2022. Additionally, this downturn came during a broader market decline, with Bitcoin dipping below $85,000, intensifying the risk-averse sentiment among altcoins. As a result, traders are now questioning whether this situation reflects market capitulation or signals the beginning of a more significant correction.

Continuous Buying Activity Despite Price Decline

Insights from CryptoQuant indicate that despite a sharp decline in Chainlink's price, which fell to $13 in November 2025, the Taker Buy Dominant metric remained high. This suggests that there is sustained buying pressure, particularly from institutional investors who view LINK as undervalued. This ongoing accumulation continues even during periods of price decline.

Chainlink Spot Taker CVDCumulative Volume Delta Source: CryptoQuant

The strong interest in purchasing LINK demonstrates that many believe in its long-term potential.

Liquidity Levels Build Around $12 as Downward Movement Slows

According to CoinGlass Liquidation Heatmaps, there was a notable density of liquidity between $12 and $13 during the sell-off in late January. Prices interacted frequently with this area before stabilizing near the lower end.

CoinGlass Liquidation Heatmap Source: CoinGlass

If Chainlink can reclaim a price above $11, it may attract liquidity-seeking activity and prompt short-covering, possibly paving the way for a return to $13. However, until that happens, sellers maintain control over the general trend.

Spike in Supply Held at a Loss Approaches Historical Highs

Analysis from Glassnode reveals that the total supply of LINK held at a loss has surged to approximately 400 million tokens. This increase suggests that a substantial number of LINK holders are currently facing losses. Historically, such spikes have preceded market bottoms and subsequent recoveries.

Supply in Loss for LINK Source: Glassnode

For example, a similar rise in the total supply held at a loss during the 2022 market downturn was followed by a significant price recovery. Given Chainlink's essential role as an infrastructure component within the blockchain ecosystem, these indicators may suggest that a market bottom is approaching. Could we soon see a price reversal for LINK?

Key Takeaways

Continuous Buying Activity Despite Price Decline

Liquidity Levels Build Around $12 as Downward Movement Slows

Spike in Supply Held at a Loss Approaches Historical Highs

Final Thoughts