03/05: CLARITY BILL REACHES STABLECOIN YIELD COMPROMISE, CLEARS PATH IN THE SENATE The CLARITY bill has reached a key compromise on stablecoin yields: passive interest is prohibited, while activity-based rewards remain allowed. This approach aims to reduce systemic risk to the banking sector without shutting down innovation in crypto. The bill is expected to be reviewed in May, with the probability of passage in 2026 rising to around 67%. Current debate centers on how flexible the framework should be—specifically, how to balance tighter risk controls with maintaining a competitive and innovative market environment. Market Takeaway The narrative leans toward “restrict passive yield, not real usage.” In the short term, capital rotation typically follows this pattern: * Outflows from passive DeFi yield strategies * Rotation into strong infrastructure, exchanges, and well-defined DeFi blue chips Short-Term Momentum Setup (News-Driven) AAVE – High sensitivity to policy headlines * Setup: Fake breakdown → reclaim (Market overreacts to yield restrictions, then reprices) * Entry: On reclaim of lost support * Stop Loss: -4% * Take Profit: +6% / +10% Capital Preservation (Safety-First Approach) 👉 Logic: After the initial sell-off, the market tends to reprice quickly, creating conditions for a short squeeze or momentum reversal. 👉Will banning passive yield reduce the overall appeal of stablecoins for investors? How will “activity-based rewards” be clearly defined and enforced to prevent regulatory loopholes? #CLARITYActYieldRules $AAVE $BTC $ETH