Bitcoin News Today: Bitcoin Liquidity Crippled by 320000 BTC Institutional ETF Squeeze

Bitcoin liquidity is coming under intense pressure as a record 320,000 BTC is pulled from trading markets and added to long-term wallets and ETF holdings [1]. This rapid withdrawal is attributed to a surge in demand from institutional and ETF investors, who have been accumulating Bitcoin at unprecedented rates since the beginning of 2025 [1]. The drawdown is significantly tightening available supply, creating a notable imbalance in exchange reserves and market liquidity [1].

Data from CryptoQuant highlights a sharp increase in both ETF demand and accumulator activity, which has pushed liquidity metrics to historic lows [1]. The green line in the relevant chart illustrates this surge, showing a dramatic uptrend in ETF inflows that have reached their highest levels since Bitcoin trading data began being tracked [1]. The monthly inflow of BTC has exceeded 30,000 coins, further draining liquidity from U.S. markets and reducing the availability of Bitcoin for open trading [1].

Accumulator address demand has also surged, surpassing all previous benchmarks in both scale and consistency. These addresses, historically associated with long-term holders and large institutional players, have added over 320,000 BTC in net demand over the last 30 days [1]. Their behavior mirrors accumulation patterns seen before major bull runs, such as the 2021 rally, raising expectations that a new phase of price appreciation may be on the horizon [1].

The pink bars on the chart represent these accumulation activities, with a striking resemblance to trends observed in 2020 [1]. The increased buying pressure has coincided with a steady rise in Bitcoin’s price, reinforcing the view that institutional demand is playing a key role in shaping the market [1]. As exchange-side liquidity continues to decline, the balance between inflow and outflow has become increasingly precarious [1].

The liquidity inventory ratio, shown in gray, continues to trend downward, indicating that the rate of BTC being removed from exchanges exceeds the rate of new supply being added [1]. This trend raises critical concerns about the ability of current liquidity levels to meet growing institutional demand [1]. If ETF inflows continue at this pace, spot markets may face supply constraints that could lead to heightened volatility or forced price adjustments if sell-side depth cannot match the buying pressure [1].

Analysts remain cautious, noting that the sustained depletion of liquidity sources may require adjustments from market makers and exchanges [1]. Whether additional inflows from miners or short-term holders can offset this outflow remains a key area of focus [1].

[1] Source: [1] Bitcoin ETF Surges as 320K BTC from Liquidity (https://cryptonewsland.com/bitcoin-etf-surges-as-320k-btc-from-liquidity/)