Chainlink: Can LINK bulls protect a drop below $20?

• Chainlink broke support at $24 after a bearish CHoCH now testing $22 zone — key to staying above $20.
• The weekly inflow transaction count is down 53% despite the 103% hike in the last 24 hours.

The overall crypto market is seeing decline potentially cause of the expectations around the first U.S. FOMC meeting of the year, drop in U.S. stock futures and DeepSeek panic selling.

Chainlink [LINK] was no exception as it recently broke through the 4-hour timeframe support at $24 after seeing a bearish change of character (CHoCH), indicating a shift in market sentiment.

This breakthrough was followed by a test of the $22 zone, which serves as a critical support level to maintain the price above the $20 threshold.

LINK showed several instances of breaks of structure (BOS) and equilibrium points, with the latest BOS leading to a fall towards $22.

If bulls do not intervene soon, Chainlink risks a further decline below this pivotal $22 support, potentially testing lower supports below $20.

A sustained move below $20 could trigger a more significant sell-off towards the $18 level — a past support zones.

Source: TradingView

Conversely, if buying pressure resumes, we might see LINK recover above the $22 level and attempt to breach the previous resistances above $24 again.

Predicatively, the key for LINK’s short-term trajectory will be its ability to hold above these crucial support zones.

Failure to do so could exacerbate the bearish momentum, while a resurgence of bulls could stabilize the decline and set the stage for a rebound towards higher resistances.

The market’s response in the coming sessions will be crucial in determining Chainlink’s path forward.

LINK’s inflow transaction count and sentiment

Despite a notable 103% increase in transaction count in the last 24 hours, the overall weekly count has dropped by 53%.

This decrease in transaction activity could suggest a waning interest or a consolidation phase after a significant spike. Historically, such a drop in inflows has often preceded further declines in price.

If this pattern holds, LINK could face continued downward pressure in the near term.

Future implications hinge on whether transaction volumes can stabilize or resume an upward trajectory, potentially influencing a price recovery.

Source: IntoTheBlock

As a result, Market Prophit’s sentiment gauges for LINK showed a divergence between general crowd sentiment, which is moderately bullish at 1.65, and the more bearish stance of market professionals or ‘smart money’ at -0.76.

When smart money sentiment is bearish, it often presages a decline or continued downward trend in price, even if general crowd sentiment is optimistic.

Read Chainlink’s [LINK] Price Prediction 2025–2026

This misalignment suggested that while retail investors might be hopeful, the cautious approach by smart money could dampen the potential for a near-term recovery in LINK’s price.

Looking ahead, this could lead to continued volatility or further declines if professional sentiment remains bearish.