I would try pulling the lever firmly with the bike not moving and holding it like that for a minute and see if the lever starts moving closer to the handlebar. If the lever starts moving closer to the handlebar as you are holding it you have a hose leak, bad master cyclinder piston seal, bad caliper piston seal or fitting leak. If a hose is leaking it could be at the fittings or near a place where the hose pivots like where it goes from the frame to the handlebars or near a shock pivot. Sometimes the fluid will not leak out if just the inner hose tubing is cracked and the outer jacketing isn't cracked, it will ballon up the outer jacketing.
Balle Racing www.balleracing.com
Pull the lever in, and either zip-tie it or wrap a rubber band around it and the bar to keep pressure on it. Let it sit overnight, and then check it the next day. If it's leaking somewhere you should be able to tell.
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