Bitcoin is facing a dwindling supply as demand continues to surge, according to new research. The latest Weekly Crypto Report from on-chain analytics platform CryptoQuant highlights a developing "sell-side liquidity crisis."

The report suggests that there is only a year's worth of sell-side liquidity available at the current rate of demand growth. The high demand for Bitcoin is attributed in part to the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States.

CryptoQuant notes that the liquid inventory of Bitcoin has hit an all-time low in terms of the number of months of demand. The analysis only includes "accumulating addresses," which are addresses with no outbound transactions, potentially underestimating the actual demand.

Looking specifically at BTC available on U.S. exchanges, the supply can only meet demand for six months if exchanges outside the US are not considered.

The report's findings align with recent observations made by CryptoQuant CEO Ki Young Ju on social media platform X (formerly Twitter). Ju commented on Bitcoin from 2010, dormant until recently moving to a new wallet address, attributing it to the sell-side liquidity crisis.

Despite previous predictions of a six-month ETF supply squeeze, recent data from the United Kingdom-based investment firm Farside shows a significant increase in net inflows, hinting at the changing dynamics in the market. However, readers are advised to conduct their own research and assess risks before making investment decisions.