TLDR
- AAVE price jumped over 22% to around $264.80, becoming the top gainer in the market
- U.S. Senate passed a key step in the GENIUS Act for stablecoin regulation, potentially benefiting DeFi platforms like AAVE
- AAVE’s Total Value Locked (TVL) has increased to $30 billion, marking a 25% increase
- Trading volume increased by more than 60%, indicating strong investor interest
- Technical indicators suggest the price could approach the $300 level if momentum continues
AAVE, a leading decentralized finance protocol, has seen its price jump more than 22% in recent trading, reaching around $264.80. The token leads the market’s top gainers today as trading volume surged by over 60%, showing strong investor interest in the DeFi platform.
The sharp price increase comes as the U.S. Senate passed a key step in the GENIUS Act, a bill focused on regulating stablecoins. This development has created buzz across the DeFi sector, with AAVE positioned as a potential major beneficiary.
Market analyst Karan Singh Arora highlighted on social media that AAVE could be one of the winners from this regulatory movement. As a central player in the DeFi lending space, clearer rules around stablecoins may create a more stable environment for the platform’s growth.
$AAVE surged over 22% in last 24 hrs 🚀
Rrecently US 🇺🇸 Senate has passed the closure vote for GENIUS Act.
This bill is aimed at regulating stablecoins.$AAVE is a key player in DeFi which can be benefitted from the Act.This Act is seen as a win for DeFi, offering clearer… pic.twitter.com/1M9bRy19Bf
— Karan Singh Arora (@thisisksa) May 20, 2025
The GENIUS Act aims to introduce clearer guidelines for stablecoin issuance and operation in the U.S. market. It seeks to build a structure that encourages innovation while protecting consumers.
AAVE operates as a decentralized system that relies on stablecoin funds for its lending and borrowing features. Clear regulations could create more stable conditions for platforms like AAVE, potentially building trust with large institutions and attracting more capital.
Technical Strength and Market Performance
On technical charts, AAVE has broken out of a well-formed ascending channel that began in early May. The price moved above the upper trendline that had been limiting upward movement.
The 50-period Simple Moving Average sits at $228.54 and continues to act as support. The price has remained above this level for the past two weeks.
The RSI currently sits at 68.65, approaching overbought territory. This suggests there might be a short pause before prices potentially move higher again.
Current resistance is between $270 and $275. If AAVE maintains its position above this range, the next target may be the $300 level.
However, if momentum fades and the price falls back into the channel, support is expected around $230, near both the lower trendline and the Simple Moving Average.
The historical chart shows that AAVE broke down from a rising wedge after completing a parabolic recovery curve. Despite a drop in volume, the price rebounded from local lows and surged by over 130%.
Technical indicators like MACD and RSI have turned bullish, showing a bullish crossover and a U-shaped recovery pattern. If AAVE rises above $280, a monthly close above $300 could follow.
Rising Total Value Locked
Another factor driving the rally is the increase in Total Value Locked (TVL) on the AAVE protocol. AAVE’s TVL has grown to $30 billion, marking a 25% increase alongside the price action.
.@aave TVL surges to $30 billion, the $AAVE price increases by 25%https://t.co/tqcgNfoHpo pic.twitter.com/7XyY7llKSF
— ICO Drops (@ICODrops) May 20, 2025
The DeFi lending protocol has recorded a new TVL of over $24-30 billion according to different sources, representing an all-time high for the platform.
TVL is a key metric for assessing DeFi platform health. Rising locked funds often reflect stronger user engagement and higher trust in the protocol. This metric, combined with the regulatory developments, contributes to increased investor interest in AAVE.
In a broader view, AAVE is undergoing a V-shaped recovery and is expected to reach the neckline between $422 and $443. A breakout above this range could start a fresh upswing, potentially pushing the price into a discovery phase and marking a new all-time high, possibly near $1000.
The DeFi lending protocol shows strong signals for the future of decentralized finance as it trades strongly since bouncing from lows near $100, suggesting a possible broader bullish breakout from its current structure.
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