BTC Moves for the First Time in a Decade Amid Bitcoin’s ‘Sell-Side Liquidity Crisis’

Bitcoin (BTC) is facing a sell-side liquidity crisis, according to a new report by CryptoQuant. The report states that the demand for Bitcoin has surged this year, driven in part by the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States. This increasing demand, coupled with a decline in sell-side liquidity, has resulted in the liquid inventory of Bitcoin dropping to the lowest level ever in terms of months of demand. The report predicts that supply dynamics may change permanently by the first quarter of 2025. The data used in the report only includes accumulating addresses, which are those with no outbound transactions, suggesting that the actual net demand for Bitcoin may be even higher. When considering only Bitcoin available on US exchanges, the liquid inventory is able to meet demand for only half the time. Additionally, there has been a recent movement of 2,000 BTC mined in 2010 from dormant wallets to a newly created address, highlighting the sell-side liquidity crisis. CryptoQuant CEO Ki Young Ju has previously predicted a supply squeeze due to ETFs and has now described the sell-side liquidity crisis as “waking up” old supply. Despite a week of net outflows, Bitcoin ETFs have seen a reversal in trend, with net inflows of $400 million on March 25, according to Farside, a UK-based investment firm. It is important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any investment decisions.