The AAVE (AAVE) price has decreased by more than 3% in the last 24 hours, currently trading at around $185 on Tuesday, December 16, 2025. Despite the impressive fundamentals of the protocol, this mid-cap altcoin, with a fully diluted valuation of approximately $3.5 billion, continues to show bearish sentiment.
What are the Recent Strong Fundamentals for AAVE Protocols
According to reports from Coinpedia, the United States Securities and Exchange Commission (SEC) has officially concluded its investigations into the AAVE protocol. This legal clarity has been crucial for the AAVE protocol, as the U.S. SEC’s decision to close the investigations without enforcement action has provided a positive outlook.
The closure of the SEC’s investigation coincided with the launch of V4 by the AAVE protocol, which aims to further explore liquidity pool aggregation, a feature that was not fully explored in V2 and V3.
As a result, the AAVE protocol has seen significant adoption globally. Currently, the AAVE V3 protocol has a total locked value of over $32 billion, with approximately $22 billion already borrowed.
The recent regulatory clarity in the United States will expedite the ability for any crypto user worldwide to borrow and lend on the AAVE protocol, as the U.S. often influences other jurisdictions in their crypto regulations.
Why is AAVE Price Declining Amid a Supportive Backdrop
The main reason for the decline in AAVE price despite strong fundamentals is attributed to a risk-off narrative prevailing among crypto investors.
Furthermore, the price action of AAVE throughout the year has shown a horizontal consolidation pattern with an upper border above $355 and a lower border around $130. The recent drop below a weekly rising logarithmic support trend has further confirmed the midterm bearish sentiment for AAVE.
The midterm bearish sentiment for AAVE price is further supported by the weekly MACD indicator, which has signaled bearish trends. The weekly MACD and signal lines have crossed below the zero line, with rising bearish histograms.
Therefore, the AAVE/USD weekly chart is expected to continue in a bearish sentiment during the end-of-year holidays. The next major support level for AAVE is around $130, which could potentially lead to a rebound towards $355 in the following weeks.
