Chainlink's technical structures reveal vulnerabilities: what to expect amid a bearish formation?

Chainlink (LINK) currently faces a challenging technical scenario that analysts cannot ignore. With an current price of $13.11 (data as of January 12, 2026) and retracements of -0.74% in 24 hours and -3.38% in the last seven days, the asset is touching critical levels that could determine its short-term direction.

A classic formation after years of recovery

After remaining in low single-digit ranges for extended periods, Chainlink experienced a significant rebound since September 2023. The token reached a cyclical high of approximately $30.94 in December 2024, representing a gain of around 440% from previous lows. However, this advance lost momentum shortly after.

On the weekly chart, the last 800 days of trading form a pattern that specialists recognize immediately: a large head and shoulders pattern. This structure began to take shape when LINK finally exited its prolonged bearish phase, but the second rally was weaker than the first. When the price made a lower high in August, the classic bearish formation was confirmed.

Why the support at $13 is the line that matters

The $13 USD zone is not just any level. It functions as the neckline of the head and shoulders pattern, making it a key technical reference point. If the weekly close breaks below this barrier, it would trigger the formal confirmation of the breakdown, significantly increasing the chances of a deeper fall toward even lower bearish targets.

Momentum indicators corroborate this concern. The RSI is below 50, and the MACD clearly shows negative territory. Crucially, both oscillators maintain sustained bearish momentum, suggesting that this negative impulse is not just short-term volatility but a deeper reversal of forces.

If the technical projection of the complete formation is fulfilled, calculations would point toward the $5 USD zone, a target that would force LINK to fall even below the lows established during the previous bearish phase.

Additional pressure on shorter timeframes

Expanding the analysis to the two-hour chart offers no additional optimism. In this timeframe, LINK is within a descending triangle, another recurring bearish chart pattern. Although the price is currently hovering around $13.50, it has yet to break above the diagonal resistance defining this compressed structure.

Descending triangles typically culminate in sharp movements. As long as LINK maintains support above $13.50, buyers could execute a tactical rebound. However, a break below this level would likely trigger a more aggressive sell attack immediately.

The bifurcation scenario: confirmation or rejection

Chainlink is approaching a decisive breakdown. Simultaneously converging are: a large bearish formation, deteriorated momentum indicators, and a compressed price range. This trifecta creates a state of technical tension that demands resolution.

A fall below the $13 would unleash signals of further decline impossible to dismiss. But as long as support holds, there is room for buyers to generate a rebound. A genuine bullish impulse breaking these bearish chart patterns could still be possible.

However, without a recovery toward short-term resistances and a break of these recessionary structures, the overall technical bias will continue to favor sellers. The next significant turn will be decisive: it will determine whether this is a false alarm or the start of a much more substantial decline for Chainlink.