AAVE, SEC investigation ends but price still can't rebound... technical bearish signals are stronger

AAVE has fallen to $148.19 in the latest trading session. Despite positive signals indicating the resolution of SEC regulatory concerns, market reactions have been lukewarm, with both spot and futures markets leaning towards bearishness. The inability of good news to support prices suggests that the supply-demand structure may be weaker than expected.

Regulatory Uncertainty Eases, But Price Fails to React

Aave founder and CEO(Stani Kulechov) announced officially on X(Twitter) that the four-year investigation by the U.S. Securities and Exchange Commission(SEC) has been concluded. He emphasized that “the DeFi ecosystem has recently faced unfair regulatory pressure,” and now an environment has been created where developers can properly build the future of blockchain finance.

In the medium term, this is definitely a positive factor. As regulatory overhang(overhang) diminishes, institutional capital and large funds can lower entry barriers, allowing protocols to focus solely on technological advancement and adoption expansion. However, the market’s reaction in the spot market was muted. Even on the day of the official announcement, AAVE dropped over 3%. The fact that good news did not trigger an upward push indicates deeper market weakness.

Futures Market Signals: More Position Liquidations Than New Capital Inflows

The problem is that it’s difficult to find signs supporting AAVE’s current bullishness in the futures market. As of Binance, open interest(OI) remains around $56.60M, near the year’s low. A shrinking OI indicates that existing long and short positions are being liquidated en masse.

For a sharp upward move, “new capital + new leverage” must flow in, but currently, the opposite is happening. Market interest is waning, and active positions are exiting. This is a key factor weakening the possibility of a technical rebound.

Chart: Breakdown of $179.27 Could Lead to $160.51 Drop

From a technical analysis perspective, AAVE has failed to break through key resistance zones. The 50-day EMA(daily moving average) at $198.64 on December 10 was a critical peak zone and coincided with the upper trendline of the downtrend channel. Failing to break through this zone has instead increased selling pressure.

Based on the current price of $148.19, the technical scenario is as follows:

Downside Scenario (Current dominance)

• Further correction toward the daily support at $179.27 is possible
• If the $179.27 support is broken on a daily close, the decline could extend to the weekly support at $160.51

Rebound Scenario

• The first target is to recover the 50-day EMA at $198.64
• Only by reclaiming this zone can it be said that “the positive impact of the SEC investigation conclusion is beginning to be reflected in the price”

Momentum Indicators Also Show Early Bearish Sentiment

Technical indicators also do not support short-term bullishness for AAVE. The RSI(Relative Strength Index) is at around 47, below the neutral 50, and MACD lines are converging, increasing the likelihood of a bearish crossover. The momentum clearly appears to be weakening.

In conclusion, while the medium-term positive factor of regulatory risk mitigation exists, the decline in futures liquidity, position liquidations, and failure at technical resistance levels exert much stronger short-term bearish pressure on AAVE. For investors aiming for a rebound, confirming the $179.27 support level will be a crucial turning point.