Important points
Why is Bitcoin stable near $110,000 despite declining leverage?
That’s because while the speculative bets are gone, strong spot demand and rising stablecoin liquidity are keeping prices strong.
Why does China’s $47 trillion money supply matter?
That’s because liquidity from China could fuel Bitcoin’s next big rally.
Bitcoin [BTC] It looks like it’s slowing down, but that’s not all.
Yes, the price is down to nearly $110,000. But borrowing is falling, liquidity is building up, and the flow of money around the world is changing. If the next big wave of capital doesn’t come from Wall Street, it may come from the East.
And that change could determine where BTC goes next.
Leverage cleared
Bitcoin’s flat price near $110,000 may worry traders, but don’t be too quick to judge.
Source: CryptoQuant
Open interest on major futures exchanges has been declining since September. This means that the leverage has been flushed without any significant breakdown in price.
Now, this is important because it shows that spot demand is supporting prices even though the speculative excess has been removed.
Source: CryptoQuant
On top of that, the Output Return Spent (SOPR) is hovering around 1.0, confirming that traders are selling closer to cost base rather than panic levels. Market participants appear to be holding steady rather than chasing short-term profits.
Meanwhile, the total supply of stablecoins increased to $158.8 billion, indicating that sidelined liquidity is waiting to be deployed.
And in that regard…
China’s liquidity overtakes US
China’s M2 money supply has exceeded $47 trillion, while the US remains close to $22 trillion, a difference of $25 trillion.
Source: Alpha Lactal
This is a structural difference and did not happen overnight.
Since the 2009 global financial crisis, China has turned to aggressive credit expansion to maintain growth and exports. While the United States slowed its economic expansion from 2021 onwards, China continued to introduce liquidity into its domestic system.
That disconnect is now showing up in data and markets.
So far, Bitcoin has trended closer to China’s liquidity curve than the US liquidity curve. The bigger story here is that that gap hasn’t reversed since 2009.
If liquidity is the fuel, will the East rise?
While global markets still anchor any narrative for the Fed, the chart shows that China’s liquidity is just as important. Stocks and cryptocurrencies often react with marginal liquidity from China.
Source: Alpha Lactal
So if the next wave of injections comes from Beijing rather than Washington, market leadership could change. Cryptocurrencies (specifically BTC) are one of the most sensitive global liquidity barometers.
More money moving around in China could provide a hidden boost to the market. This is something that US analysts have not given much thought to.
If capital rotates eastward, cryptocurrencies could become one of the first markets to set prices.