Bitcoin ‘sell-side liquidity crisis’ sees BTC move for first time since 2010

Bitcoin (BTC) has less time than ever before, according to a new study.

In its recent “Weekly Crypto Report” on March 26, on-chain analytics platform CryptoQuant described an ongoing “sell-side financial crisis.”

Report: “12 months” before Bitcoin dries up

Interest in Bitcoin has rocketed this year, in part due to the rise of Bitcoin Exchange Traded Funds (ETFs) in the United States.

This relentless bidding is now starting to make itself felt, says CryptoQuant – and supply dynamics could change forever in Q1 2025.

“Recording demand for Bitcoin combined with a decline in sell-side liquidity has resulted in Bitcoin liquid inventory falling to an all-time low relative to monthly demand,” the report said.

“We estimate that the current supply of Bitcoin sell-side liquid reserves is sufficient to cover growing demand for twelve months at the current rate.”

CryptoQuant adds that only “accumulating addresses” – which have no outgoing transactions – are included in the calculations, which means that the net demand can still be high.

“This is only considering the need to collect addresses, which can be considered as a low demand for Bitcoin,” he wrote.

Judging by the strong availability of BTC on US exchanges, the supply can meet the demand for half the time.

“If we exclude Bitcoin on non-U.S. exchanges, Bitcoin liquid reserves will decrease to six months of demand. Considering that U.S. spot Bitcoin ETFs only source Bitcoin from U.S. entities, we exclude these exchanges,” the report explains.

2,000 BTC in motion since 2010

Following up on the topic via X (formerly Twitter), CryptoQuant CEO Ki Young Joo described the sell-side liquidity problem as “reactivating” the old supply.

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In the year Coins that were minted in 2010 and were apparently dormant after they were suddenly moved to a new wallet address.

He advanced the narrative of a squeeze on ETF supply by predicting a six-month run in mid-March when ETF earnings beat records.

Since then, the products have seen a continuous net flow of the comparison week, this trend is reversing.

The latest data from UK-based investment firm Farside showed net income of $400 million for March 25 – the highest in two weeks.

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