Chainlink's 22% crash sparks fears of a deeper stock market downturn

Chainlink (LINK) suffered a sharp 22% drop in late January 2026, ending a months-long upward trend. The decline came as Bitcoin also fell below $85,000, dragging down the wider crypto market. Analysts now question whether this marks a final sell-off or the beginning of a longer downturn in the stock market today.

The sell-off pushed LINK's price through a key support zone between $10.6 and $11.75, which had held firm since mid-November 2025. At the same time, the token's Relative Strength Index (RSI) hit its lowest point since 2022, signalling extreme weakness. Liquidity began to gather around $12 as the decline slowed, with prices stabilising near the lower end of the range.

Data showed that around 400 million LINK tokens were held at a loss, meaning a large portion of investors were underwater. Historically, such spikes in supply held in loss have often preceded market bottoms and later recoveries in the stock market. Despite the steep drop, the Taker Buy Dominant metric remained high, suggesting persistent buying interest.

Before the crash, LINK had climbed from a low of roughly $10 in late 2025 to about $15 by early February 2026. The rally was supported by Chainlink's strong position as a leading oracle network. However, the failure to hold key support levels added technical pressure, leading to further downside in the stock market. A recovery above $11 could trigger liquidity-seeking trades and short-covering, potentially pushing prices back toward $13.

The broader stock market also faced stress, with reduced leverage following liquidations in late 2025. This reset contributed to the recent volatility, leaving traders uncertain about the next move in the stock market today.

LINK's price now sits near $12 after breaking critical support levels. The surge in underwater holders and elevated buying pressure suggest mixed signals for recovery in the stock market. A sustained move above $11 may determine whether the token regains momentum or faces further declines in the stock market.