Bitcoin May Face Sell-Side Liquidity Crunch as Demand Soars: CryptoQuant Analysis

Bitcoin seems headed for a sell-side liquidity crisis in the coming months. Demand is exploding. It's never been this high before.

A recent CryptoQuant weekly report paints a concerning picture. Their analysts think the current Bitcoin sell-side liquidity might only last six to twelve months. Not great timing. If liquid inventory drops further, BTC prices could shoot up dramatically.

Demand Going Crazy

Monthly Bitcoin demand has gone through the roof. By September 2025, we're looking at demand around 450,000 BTC. Kind of surprising, honestly.

CryptoQuant tracks this by watching accumulation addresses - addresses that just receive and hold. These typically have over 10 BTC, don't send anything out, aren't mining pools, and have been active recently.

What's driving this? U.S. Bitcoin ETFs, mostly. And whales. Big ones. Year-on-year whale balance growth is at historic highs. They now control about 2.8 million BTC. That's a lot.

Meanwhile, sell-side liquidity keeps shrinking. BTC at sell-side entities has fallen to around 2.1 million BTC. Back in March 2020, it was 3.5 million. These entities include OTC desks, miners, and even seized BTC held by the U.S. government.

The Squeeze Is Coming

Demand up. Liquidity down. The liquid inventory of Bitcoin has crashed to its lowest level ever compared to monthly demand.

CryptoQuant says, "Our estimates indicate the current Bitcoin sell-side liquidity inventory will only sustain demand growing at the present rate for approximately twelve months. This calculation only factors in demand from accumulating addresses, which may be considered the lower threshold of actual Bitcoin demand."

It might be worse. If you take out non-U.S. sources, we're looking at just six months of coverage. U.S. spot ETFs mainly buy from domestic sources. It's not entirely clear how this will play out, but the supply-demand gap is widening fast in the Bitcoin market.