In Brief

• Open interest drops sharply, signaling a market-wide leverage flush-out.
  
• SOPR stabilizes near 1.0, showing reduced panic selling and calm trader sentiment.
  
• Stablecoin supply hits $158.8B, indicating sidelined capital ready to re-enter markets.

Bitcoin is holding near $110,000 while key on-chain indicators suggest the market is resetting, not breaking down. A sharp decline in open interest across exchanges signals a major reduction in leveraged positions.

Since late September, open interest has fallen significantly, according to CryptoQuant data, indicating speculative excess has been removed. This drop often precedes a more stable market environment and potential upward momentum.

At the same time, the Spent Output Profit Ratio (SOPR) has hovered near 1.0, signalling neutral sentiment among market participants. This suggests traders are no longer panic-selling, and losses are being absorbed calmly.

Analyst @CryptosR_Us described the current conditions as a post-capitulation phase, with long-term holders re-entering the market. Price volatility remains, but underlying sentiment has cooled and reset expectations.

Bitcoin's 7-day performance shows a 4.52% drop, based on CoinMarketCap data, while the price is currently trading at $109,645. Despite the dip, the 1-hour and 24-hour changes show only mild fluctuations.

Stablecoin supply growth signals rising capital readiness

The total ERC20 stablecoin supply has surged past $158.8 billion, setting a new all-time high in late October. This rise indicates more liquidity is now waiting on the sidelines, potentially ready to re-enter the market.

Increasing stablecoin supply often signals capital readiness, as investors park funds in stable assets before rotating into risk assets. This trend could act as fuel for the next Bitcoin rally if demand returns.

Meanwhile, analyst Ali posted a chart suggesting Bitcoin may form a new high before facing a strong correction. His analysis shows a broadening top pattern with two potential scenarios: breakout or reversal.

While technical uncertainty remains, the market structure is aligning with previous reset phases. With leverage wiped, panic cooled, and liquidity rising, conditions favor a bullish recovery rather than a deeper decline.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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