The youngster plans to leave the Premier League side when his contract expires in the summer, according to reports.
The Reds have turned down a £3m bid from their Premier League rivals Watford for the 19-year-old, despite the fact that the striker is out of contract in the summer, and does not plan to sign a new deal on Merseyside (via The Sun).
While The Sun reports that Sinclair wishes to join the Hornets, they are apparently unwilling to increase their bid any further, meaning that the forward could be set to see out the final months of his contract before departing at the end of the season.
Considering he is yet to really make a significant impact for Jurgen Klopp's side, it seems extremely difficult to imagine why a club would want to meet Liverpool's asking price when he could be available for nothing in the summer.
Although any interested side would still have to pay compensation to the Reds (via Liverpool Echo), it appears to make more sense to attempt to complete a deal when his contract expires, rather than spend £5m on him now.