Key Takeaways
Why is Bitcoin steady near $110K even as leverage drops?
Because speculative bets are gone, but strong spot demand and rising stablecoin liquidity are holding prices firm.
Why does China’s $47 trillion money supply matter?
Because liquidity from China could fuel Bitcoin’s next major rally.
Bitcoin [BTC] looks like it’s slowing down, but there’s more.
Yes, price is cooling near $110K. But borrowing is going down, liquidity is piling up, and the flow of money around the world is shifting. If the next major capital wave doesn’t come from Wall Street, it may come from the East.
And that shift could define where BTC goes next.
Leverage has been cleared
Bitcoin’s flat price near $110K may have traders worried, but don’t be quick to judge!
Source: CryptoQuant
Since September, Open Interest across major Futures exchanges has dropped. This meant leverage had been flushed out without a major price breakdown.
Now this is important, as it shows that speculative excess has been removed, yet Spot demand has supported the price.
Source: CryptoQuant
On top of that, the Spent Output Profit Ratio (SOPR) hovered near 1.0, confirming that traders sold near cost basis instead of panic levels. Market participants appear to be holding steady rather than chasing short-term profits.
Meanwhile, the total Stablecoin Supply rose to $158.8 billion, showing that sidelined liquidity is waiting for deployment.
And on that note…
China’s liquidity overtakes the U.S.
China’s M2 Money Supply has crossed $47 trillion, while the U.S. sat near $22 trillion – a $25T gap!
Source: Alphractal
This is a structural difference, and it didn’t happen overnight.
Since the GFC in 2009, China has leaned on aggressive credit expansion to keep growth and exports running. The U.S. slowed expansion after 2021, but China kept pushing liquidity into its system.
That divergence is now visible in the data and in markets.
So far, Bitcoin has trended closer to China’s liquidity curve than America’s. The bigger story here is that the gap has never reversed since 2009!
If liquidity is fuel, is the East set to rise?
Global markets still anchor every narrative to the Fed, but the charts show that China’s liquidity mattered just as much. Stocks and crypto have often reacted more to marginal liquidity from China.
Source: Alphractal
So if the next injection wave comes from Beijing instead of Washington, market leadership could shift. Crypto (especially BTC) is one of the most sensitive global liquidity barometers.
More money moving around in China could give markets a hidden boost. This is one that U.S. analysts aren’t really taking into account.
If capital rotates East, crypto could become one of the first markets to price it in!