AAVE price remains bearish, SEC investigation closure also fails to provide 'relief'… what signals is the market sending?

Despite positive signals such as regulatory risk mitigation, AAVE continues to lag behind. Trading at $147.79 based on the latest data, AAVE has not escaped the recent bearish phase. Even with news that the US SEC has concluded its long-term investigation into the Aave protocol, the price reaction was limited and below expectations. This suggests that market sentiment itself has already weakened beyond mere technical weakness.

Regulatory Uncertainty Resolved, But What About the Price?

Aave founder and CEO Stani Kulechov recently announced via official channels that the SEC’s four-year investigation has been completed. This marks an important turning point for DeFi protocols. As regulatory risks decrease, institutional investors face lower entry barriers, and the protocol development team can focus more proactively on growth.

However, market reaction was lukewarm. On the day of the news release, AAVE fell more than 3%. While it is paradoxical that positive news did not push the price higher, it sends a clear signal to market participants: the supply-demand structure and momentum are still sufficiently weak.

The Reality Told by Derivatives Markets

Open interest (OI) data from Binance futures markets supports this. Currently, AAVE’s open interest is around $56.60M, near the low point of the year. A decline in OI indicates that active positions are exiting the market.

For a strong upward movement to form, new funds and leverage positions must continuously enter. Currently, the opposite is happening. Existing positions are being liquidated, and market interest is waning, indicating that short-term bearish pressure dominates.

Technical Chart: Accelerated Decline After Failed Breakthrough of Sequential Resistance

The 50-day EMA at $198.64 was a critical resistance level for AAVE. After being rejected at this level on December 10, the price fell about 8%, overlapping with the upper trendline of the downward channel. Failing to break through this zone signifies more than just a technical failure; it indicates that upward momentum has weakened.

The current downside scenario at $147.79 is clear:

• Primary support: $179.27 ( daily support level )
• Secondary support: $160.51 ( weekly support level )

If $179.27 breaks, the depth of correction is likely to deepen, opening the possibility of falling to $160.51.

Momentum indicators also confirm bearishness. RSI is at 47, below the neutral 50, and the MACD line is showing signs of a bearish crossover.

Rebound Scenario and Realistic Conditions

If the market attempts a rebound, the immediate target is to recover back to $198.64. Regaining this level would confirm that “regulatory risk mitigation is starting to be reflected in the price.” Until then, positive news is interpreted as mere “background news” by the market.

In the short term, the focus is on defending $179.27 while waiting for momentum to recover.