Chainlink faces the risk of a prolonged fall into early 2026, despite the expanding ecosystem.

Chainlink (LINK) fell about 2% at the time of writing on Tuesday, extending a declining streak with a drop of nearly 5% since the beginning of December. This development puts the oracle token at risk of recording its fourth consecutive bearish month, a rather unfavorable signal that could foreshadow a poor start for 2026.

Notably, the downward trend of LINK seems to disregard significant progress in expanding the Chainlink ecosystem. In December, the project announced a partnership with Coinbase along with the Base-Solana bridge, continuing the strategic agreement with Swift signed back in September. At the same time, confidence from institutions and internal teams remains strong, as evidenced by the net capital flowing into LINK-focused ETFs as well as the increasing reserves of Chainlink, which now exceed 1.23 million LINK.

However, the technical picture of LINK still leans towards a bearish trend as the cryptocurrency market continues to face pressure. Additionally, the preference of some influential figures – notably Cardano founder Charles Hoskinson – for choosing Pyth Network over Chainlink adds to the resistance against the short-term outlook of this token.

Chainlink enables interoperability between Coinbase and Solana

Chainlink announced a strategic partnership with Coinbase on December 11, providing bridge infrastructure through the Cross-Chain Interoperability Protocol (CCIP). This collaboration aims to promote the ecosystem of wrapped assets on Base, including cbBTC, cbETH, cbDOGE, cbLTC, cbADA, and cbXRP.

Mr. Josh Leavitt, Senior Director of Product Management at Coinbase, stated that Coinbase chose Chainlink because of the project's leading position in the cross-chain connectivity space. According to him, the infrastructure provided by Chainlink offers a reliable solution, helping Coinbase safely and effectively expand its wrapped asset portfolio.

Notably, this partnership announcement comes just a week after the Base-Solana bridge officially went live, also secured by Chainlink's CCIP. This bridge allows assets to be seamlessly transferred between the two blockchains, thereby laying the groundwork for a “always-on” capital market, uninterrupted by time or infrastructure.

Earlier, in September, Chainlink also partnered with Swift – the global payment system compliant with ISO 20022 standards – to develop infrastructure that allows blockchains to transact through Swift. This solution helps banks continue to leverage their existing backend systems while gradually approaching tokenized assets with faster payment speeds and superior cross-chain interoperability.

The trust of the organization and the core team remains strong as the network grows stronger.

The ETF fund focused on LINK managed by Grayscale has recorded a net capital flow of 58.28 million USD in December to date. Notably, on Monday alone, it attracted an additional 1.99 million USD, marking the return of capital flow after two consecutive sessions where the market did not record new net capital.

LINK ETF data | Source: SosovalueOn the contrary, the Chainlink Reserve Fund – formed from the platform's revenue – has purchased 1.23 million LINK at an average price of 17.78 USD, according to data updated until Tuesday. This move demonstrates the ecosystem's long-term confidence in the intrinsic value of LINK.

Chainlink Reserves | Source: ChainlinkFrom a network perspective, core metrics continue to improve. The Supported Transaction Value Index (TVE) – reflecting the total transaction value backed by the Chainlink oracle – has reached $27.47 trillion. Meanwhile, the Total Value Secured (TVS) increased to $78.29 billion, compared to $76.87 billion in November, indicating a steady rise in the demand for Chainlink's oracle usage.

Statistics of Chainlink | Source: ChainlinkHowever, the competitive pressure in the oracle field is becoming increasingly evident. In a recent interview, Charles Hoskinson, the founder of Cardano, stated that Pyth Network could provide oracle solutions at a lower cost than Chainlink while still meeting enterprise-grade standards. This indicates that the race for innovation in the oracle sector is likely to enter a more intense competitive phase in the near future.

Chainlink faces the risk of a deeper fall below the 10 USD mark

Chainlink is currently hovering around the 12 USD mark at the time of writing, significantly down from the peak of 15.01 USD recorded on December 9. The price entering its fourth consecutive month of correction is putting significant pressure on the long-term support line connecting the lows of August 2024 and April 2025, an area that currently coincides with the Pivot Point S1 around 10.94 USD.

In a negative scenario, if LINK breaks below the November low at 11.61 USD and forms a clear monthly close below this level, a stronger bearish trend may be triggered, pulling the price back to the August 2024 low at 8.08 USD. Furthermore, the risk could extend to the Pivot Point S2 at 5.55 USD — a price area very close to the 2023 low around 4.76 USD.

Monthly LINK/USDT Chart | Source: TradingViewTechnical signals on the monthly timeframe continue to lean towards a bearish trend. The RSI index has fallen to 46 and slipped below the neutral level, while the MACD line has crossed below the signal line, indicating that selling momentum is returning to the market.

On a positive note, if buying pressure emerges to help the price firmly bounce back from the 11.61 USD range, Chainlink may form a notable recovery phase, aiming to retest the important psychological level of 20 USD.

SN_Nour