Bitcoin Sell Side Liquidity Under Threat: Potential Crisis in 6 Months

Crypto News– During a recent discussion on the X platform, Ki Young Ju, the founder of CryptoQuant, voiced apprehensions regarding the ongoing surge of capital into spot Bitcoin ETFs.

Bitcoin Sell Side Liquidity Under Threat: Potential Crisis in 6 Months

He expressed concerns about the possibility of a sell-side liquidity crisis emerging within the cryptocurrency market, particularly emphasizing that this risk could materialize within the span of the next six months should the current trend persist unchecked.

Concerns Arising Over Potential Sell-Side Liquidity Crisis

Ju stressed that “Bears can’t win this game until spot Bitcoin ETF inflow stops.” He underscored that over the past week alone, spot Bitcoin ETFs saw netflows surpassing 30,000 BTC, with significant entities such as exchanges and miners collectively holding approximately three million BTC, out of which 1.5 million BTC are held by entities within the U.S.

Recent data provided by BitMEX Research reveals that spot Bitcoin ETFs crossed the $10 billion inflow milestone for the first time since their launch in January. This notable surge in inflows has sparked concerns among market observers regarding the potential emergence of a future sell-side crisis.

Ju went on to predict that once the tipping point stemming from spot Bitcoin ETF demand is reached, the impact on BTC’s price could exceed market expectations. He emphasized that a sell-side liquidity crisis might lead to a cyclical peak surpassing projections due to limited sell-side liquidity and a thin order book.

Pointing out ongoing trends, Ju highlighted an upward trajectory in BTC held by “accumulation addresses” – wallets characterized by solely inbound transactions. However, he noted that for the crisis to materialize, the accumulation address must amass around 3 million BTC.