• LINK dropped 46%, testing critical $13 support as traders eye potential $7 downside.
• Open interest and leverage decline show cautious market sentiment awaiting a clear breakout.
• Exchange outflows hint at long-term accumulation, suggesting possible recovery if $13 holds.

Chainlink — LINK, is facing a major test after a sharp 46% price drop from the recent highs. The token trades near $17.60, with traders watching closely to see if buyers can defend the key $13 zone. This level has acted as a strong floor in previous cycles, and a failure to hold it could open the path toward $7. Despite the steep correction, long-term sentiment remains cautiously optimistic.

Price Action and Key Levels to Watch

LINK recently attempted a modest recovery after a deep slide from $23.72. The token found temporary support around $16.98, which aligns with the 50% Fibonacci retracement zone. This reaction suggests buyers are beginning to show interest again, though confidence remains fragile.The price now faces a tough resistance cluster between $17.96 and $18.78. Both the 50 and 100 exponential moving averages converge here, forming a crucial barrier for bullish traders.

A confirmed breakout above this zone could spark a push toward $20.84, an area that previously marked a sharp reversal. However, if LINK fails to clear resistance, the short-term outlook stays neutral. A drop below $16.98 would likely trigger renewed selling pressure toward $15.39 or even $13.42. Those two levels serve as key support zones where buyers have previously stepped in. Maintaining strength above $16.98 is therefore essential for bulls seeking to reclaim control of the trend.

Open interest data supports this cautious stance. Chainlink’s futures market has cooled sharply since mid-2024. Open interest dropped from a high above $1.5 billion, recorded when LINK traded near $27, to around $641 million in late October 2025. This decline shows traders are reducing leverage exposure and avoiding aggressive speculation. Such a reset often precedes major volatility once confidence returns.

Exchange Flows Signal Long-Term Accumulation

While short-term sentiment looks uncertain, on-chain metrics hint at gradual accumulation. Throughout 2025, LINK has seen steady exchange outflows, suggesting that long-term holders are quietly building positions. These consistent withdrawals typically reflect investor confidence, as tokens move away from exchanges and into private wallets.

Occasional inflow spikes between January and August coincided with brief rallies, hinting at minor profit-taking rather than heavy selling. On October 23, Chainlink recorded a $592,000 net inflow as price traded near $17.59, pointing to short-term trading activity. Yet, the overall trend of declining exchange balances suggests reduced selling pressure.

Historically, phases of low exchange supply and subdued leverage often set the stage for strong recoveries. If LINK can stabilize above $13, a base for a new upward phase could form. However, losing that level might pull price toward the $7 zone, where deeper value buyers might re-emerge.