**Why Is Bitcoin Steady Near $110K Even as Leverage Drops?**

Bitcoin’s price has been holding steady near $110,000 despite a noticeable drop in leverage across futures markets. This stability can be attributed to the disappearance of speculative bets, while strong spot demand and rising stablecoin liquidity continue to support the price.

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**Key Takeaways**

– Speculative bets have largely vanished, reducing risky leveraged positions.
– Strong spot demand is keeping Bitcoin prices firm around $110K.
– Stablecoin supply is rising, indicating sidelined liquidity ready for deployment.
– China’s vast $47 trillion money supply presents a potential new source of liquidity.
– Capital flow appears to be shifting eastward, which could influence Bitcoin’s next major move.

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**Bitcoin Looks Like It’s Slowing Down — But There’s More Beneath the Surface**

Although Bitcoin’s price has cooled near the $110K mark, other significant market dynamics are at play. Borrowing and leverage levels are falling, liquidity is building up, and global money flows are shifting. If Wall Street isn’t the source of the next major capital wave, then perhaps liquidity from the East will be.

This potential shift could be pivotal in determining Bitcoin’s next directional move.

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**Leverage Has Been Cleared**

Bitcoin’s relatively flat price near $110K may cause concern among traders, but the recent drop in Open Interest across major futures exchanges tells a different story. Since September, leverage has been flushed out without triggering a major price breakdown. This is crucial because it shows that speculative excess has been removed, while spot demand continues to hold the price.

Additionally, the Spent Output Profit Ratio (SOPR) has hovered near 1.0, indicating that traders are selling near their cost basis rather than at panic-induced losses. Market participants seem to be holding steady, avoiding the chase for short-term profits.

Meanwhile, total stablecoin supply has risen to $158.8 billion, signaling that significant liquidity is waiting on the sidelines, ready to be deployed when the time is right.

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**Why China’s $47 Trillion Money Supply Matters**

China’s M2 money supply has recently surpassed $47 trillion — more than double the U.S. supply, which sits near $22 trillion. This $25 trillion gap is a structural difference that has developed over time.

Since the Global Financial Crisis (GFC) in 2009, China has relied on aggressive credit expansion to fuel growth and exports. While the U.S. slowed its liquidity expansion after 2021, China continued pumping liquidity into its economy. This divergence is apparent both in data and market behavior.

Interestingly, Bitcoin’s price trends have aligned more closely with China’s liquidity curve than with that of the U.S. Moreover, the gap in liquidity between the two nations has never reversed since 2009.

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**Is the East Set to Rise as a New Source of Capital?**

Global markets often center their narratives around the U.S. Federal Reserve, but data shows that China’s liquidity injections have wielded considerable influence as well. Both stocks and cryptocurrencies, especially Bitcoin, have reacted to marginal liquidity changes coming out of China.

If the next major wave of capital inflows originates from Beijing rather than Washington, we may see a shift in market leadership. Crypto’s sensitivity to global liquidity flows means that increased money movement in China could give markets a subtle but powerful boost.

This shift toward Eastern liquidity sources is a factor that many U.S.-centric analysts might be overlooking. Should capital flow rotate more toward the East, crypto markets could become one of the first to price in this new reality.

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**Conclusion**

Bitcoin’s steady price near $110K amidst declining leverage highlights a market transitioning away from speculative excess toward more fundamental liquidity support. With strong stablecoin supply and China’s massive money base, the next major rally for Bitcoin may be fueled by liquidity from the East rather than traditional Western markets.

Staying attuned to these liquidity flows could provide critical insights into where Bitcoin and broader crypto markets head next.
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