Chainlink LINK Plunges 7.77% After Oracle Glitch Causes $532K in Losses

Chainlink’s oracle network experienced a critical update failure, resulting in $532,000 in user losses within just three minutes. The incident caused LINK’s price to drop 7.77% to $14.54, raising concerns about the project’s reliability despite its dominant position in the decentralized oracle market.

On-chain analytics revealed a severe liquidation cascade, with Alphractal’s heatmap showing aggressive purging of long positions. The current setup indicates potential for a short squeeze if LINK stabilizes NEAR the $13.86 support level, similar to historical bottoms that preceded rapid recoveries.

Technical indicators are now in oversold territory, contrasting with the bearish market sentiment. This creates tension between the $13.86 support and $16 resistance zones. Traders are closely monitoring liquidation patterns for signs of either capitulation or accumulation.