Chainlink hits a critical floor — Is smart money set for a breakout?

Key Takeaways 

What does LINK’s breakdown below $16 reveal about market structure?

It shows stress on a major supply zone, yet shrinking exchange reserves and an Elliott rebound keep recovery potential alive.

Do traders show confidence in a possible LINK reversal?

Yes, strong Taker Buy dominance and heavy long positioning among top traders indicate rising conviction in a trend shift.

Chainlink’s [LINK] sharp decline below the key $16 support zone placed 53.87 million accumulated tokens under pressure as sentiment weakened and downside momentum expanded.

The cost-basis heatmap showed strong earlier buying at that zone, and its loss turned the area into resistance that traders monitored. In fact, the breakdown shifted psychology, because buyers expected continuation instead of rejection.

Even so, LINK still traded near a dense activity cluster, and patient holders waited for recovery signals. That cluster became the key rebound area for the short term.

Shrinking exchange reserves hint at bullish pressure

Chainlink Exchange Reserves continued falling, and the additional 2.26% decline toward 1.8 billion strengthened the narrative of ongoing accumulation rather than distribution. 

Holders removed LINK from exchanges, which signaled confidence despite the correction.

On top of that, shrinking reserves reduced sell-side liquidity and supported sharper upside when buyers returned. Outflows also tended to precede stabilization by limiting supply pressure.

However, the $16 breakdown still weighed on sentiment, and short-term traders waited for a firmer base. Even so, persistent reserve declines built a constructive backdrop for any recovery.

Source: CryptoQuant

Rebound forms inside Chainlink’s descending channel

Chainlink traded inside a well-defined descending channel that guided its corrective structure since early September. 

The price now hovered near the lower boundary, where buyers triggered a rebound after completing an Elliott A-B-C correction. The reaction from the “C” leg showed that the market still respects the lower channel support. 

Having said that, LINK still needed a move above the mid-channel zone to shift sentiment. A break above that midpoint opened space toward $16.64, which aligned with a past supply block.

A clean reclaim of $16.64 exposed $19.13 as the next objective. The broader projection pointed toward $23.64 if momentum strengthened, although LINK needed intermediate breaks first.

By contrast, rejection at the mid-channel region weakened the bullish setup and reopened the path toward lower lows.

Source: TradingView

Chainlink Taker Buy dominance accelerates

Futures Taker Buy CVD remained firmly in buy-side control, and this indicated stronger market participation from aggressive buyers during the correction. The consistent inflow of taker buys showed real conviction rather than passive positioning. 

Moreover, the rising CVD curve aligned with the rebound from the “C” wave on the chart, and this added credibility to the early reversal attempt. 

Additionally, this trend matched the steady drop in Exchange Reserves, and the two signals often appear together during accumulation phases. 

However, Futures’ strength required Spot confirmation before LINK can sustain momentum. Even with this condition, the strong CVD behavior supports the developing bullish narrative.

Source: CryptoQuant

LINK top traders tilt heavily long

Binance Top-Trader Positioning showed 74.32% long accounts versus 25.68% short, and the resulting ratio of 2.89 highlighted strong conviction among experienced participants. 

The long bias strengthens the broader accumulation picture and aligns with the Taker Buy CVD trend. 

Moreover, top traders often increased long exposure during late-stage corrections, which reinforced the rebound from channel support. This positioning suggested expectations of a mid-channel reclaim.

Even so, LINK still needed a break above $16.64 before a clear trend shift. But strategic traders leaned toward recovery rather than continued decline.

Source: CoinGlass

Conclusively, Chainlink showed early signs of stabilization as exchange outflows rose, Taker Buy CVD strengthened, and top traders increased long exposure. Moreover, the Elliott rebound and channel support improve the technical backdrop. 

However, LINK must reclaim $16.64 to confirm momentum. If buyers maintain pressure, the path toward $19.13 remains realistic. The next sessions will reveal whether accumulation outweighs lingering bearish sentiment.