Aave (AAVE) Rockets 20% as Senate Stablecoin Bill Sparks DeFi Frenzy—Bankers Grumble About ’Unregulated Yield Farms’

DeFi’s lending behemoth Aave surges on regulatory tailwinds as Washington finally gets around to pretending it understands stablecoins. Liquidity pools overflow while TradFi analysts scramble to explain why their 0.5% APY savings accounts still exist.

The Senate’s half-baked stablecoin framework—drafted by aides who just discovered what a smart contract is—has ironically become rocket fuel for decentralized protocols. AAVE bulls ignore the irony as prices punch through resistance levels.

Meanwhile in Wall Street boardrooms: ’If we call our repo market a ’liquidity mining program,’ can we charge 10x the fees?’

TLDR:

• AAVE price jumped over 22% in a single day, reaching around $264.80
• The U.S. Senate’s progress on the GENIUS Act, a stablecoin regulation bill, is driving investor interest
• AAVE’s Total Value Locked (TVL) has increased to between $24-30 billion
• A whale investor purchased $7.45 million worth of AAVE in a two-day period
• Technical analysis shows AAVE breaking out of an ascending channel with resistance between $270-$275

AAVE is experiencing a price surge, with its value climbing more than 22% in just 24 hours. The token reached approximately $264.80, making it the top gainer in the crypto market.

The price jump coincides with a massive increase in trading volume, which ROSE by over 60%, indicating strong investor interest and participation.

The primary catalyst behind this bullish movement appears to be progress in U.S. regulatory developments. The Senate recently advanced the GENIUS Act, legislation focused on creating a framework for stablecoin regulation.

This regulatory step has particular importance for AAVE, as noted by analyst Karan Singh Arora. As a DeFi lending platform, AAVE relies heavily on stablecoins for its core lending and borrowing functions.

$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 establish clearer guidelines for stablecoin issuance and operation in the United States. This framework is designed to foster responsible innovation while maintaining consumer protections.

Whale Activity and Technical Indicators

Market data reveals that a single whale investor accumulated $7.45 million worth of Aave tokens in a concentrated two-day buying spree, further driving market sentiment.

From a technical perspective, AAVE has broken out of an ascending channel that began forming in early May. The price moved above the upper trendline that had previously limited upward price action.

The token is maintaining position above its 50-period Simple Moving Average, which sits at $228.54 and has served as reliable support for the past two weeks.

The Relative Strength Index (RSI) is reading 68.65, approaching overbought territory. This suggests a potential short-term consolidation before further upward movement.

Current resistance is identified between $270 and $275. If AAVE maintains its position above this range, the $300 level becomes the next psychological target.

Support levels are expected around $230, which aligns with both the lower trendline of the channel and the Simple Moving Average.

Growth in Total Value Locked

Another factor supporting the rally is the increase in Total Value Locked (TVL) on the AAVE protocol. Reports indicate the TVL has reached between $24-30 billion, representing a substantial increase that coincides with the price action.

TVL serves as a key health indicator for DeFi platforms. Rising locked funds typically reflect higher user engagement and increased trust in the protocol.

.@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

AAVE’s historical chart shows the price recovered from local lows NEAR $100, surging by over 130%. Technical indicators like MACD and RSI have turned bullish, with a bullish crossover and u-shaped recovery pattern.

If AAVE secures the resistance level at $280, a monthly close above $300 could follow. From a broader perspective, the token is undergoing a steep, V-shaped recovery pattern.

Analysts suggest the price could reach the neckline between $422 and $443. A breakout above this range might trigger a fresh upswing, potentially pushing AAVE into price discovery and toward new all-time highs.