recently the majority of people see btc and use it as an investment opportunity. If there won`t be liquidity in market than the demand will fall sharply and even if someone would like to dump their coins they won`t be able to find any buyer which would make the coins without any value.
I even do not see how this can ever happen in the first place as long as bitcoin maintain its value as a currency and there is always someone willing to collect it at a particular point in time. Moreover, it is market and market makers make all the main movements in the market, which I believe for bitcoin to get to that point, it will not even be allowed to be perceived weak considering that is where they make a lot of money from.
But when someone is selling his bitcoin isn't it being replaced by someone else who is buying ?
I mean if i own 1 BTC and i sold it on the exchange, now someone else owns my 1 BTC ?
That is the point and that is why it is called exchange. At a point, even if supply is more than demand, the only thing that makes it sensible is that someone is still holding at a specific value and we are all in the auction market bidding, supply cannot keep on forever as long as bitcoin is not useless, and it would die down, and then those who are holding will decide to put the amount they are willing to release.