How Can a Flash Crash Be Attributed to a Sudden Lack of Market Depth?

A flash crash occurs when a large sell order (or a cascade of orders) is executed in a market with a sudden, temporary lack of depth. The order rapidly consumes the available liquidity at progressively lower prices, causing a sharp, brief price drop.

The lack of resting limit buy orders to absorb the volume allows the price to fall dramatically before liquidity returns or circuit breakers activate.