Bitcoin Cash (BCH), a cryptocurrency birthed from a hard fork of the Bitcoin blockchain in 2017, experienced a dramatic 20% decline last week, marking its steepest drop since April, according to data from TradingView and CoinDesk. The plunge occurred as the now-defunct Mt. Gox exchange announced plans to begin reimbursing creditors with approximately $9 billion worth of tokens seized during a 2014 hack. This includes $73 million worth of BCH, representing 20% of the token’s daily trading volume.

The panic selling by BCH holders, who anticipated potential mass liquidations by Mt. Gox creditors, was exacerbated by poor liquidity or order-book depth across centralized exchanges, as reported by Paris-based analytics firm Kaiko. In markets with inadequate liquidity, traders struggle to execute large orders at stable prices, leading to heightened volatility when substantial buy or sell orders are placed.

Read more: Bitcoin Plummets Below $54K Amidst Mt. Gox Repayment Speculations

“Examining BCH price slippage for a simulated $100k sell order, it peaked at its highest level in over a month across most exchanges, highlighting deteriorating liquidity due to insufficient order book depth for large market orders,” Kaiko noted in its Monday newsletter. Slippage, the difference between the expected price of a trade and the actual execution price, surged significantly, reflecting poor market liquidity and heightened volatility.

On July 5, the day Mt. Gox announced the reimbursements, slippage in BCH markets on Bybit skyrocketed to 2.8% from 0.2%, and on Itbit, it rose to 3.5% from 0.3%, according to Kaiko. This liquidity crisis has particularly impacted altcoins—cryptocurrencies other than BTC—since the bankruptcy of the FTX exchange and its sister entity, Alameda Research, in November 2022. Alameda was a major market maker, supplying billions in liquidity to various altcoins.

Kaiko’s analysis indicated that the poor liquidity “coincided with strong selling pressure related to the Mt. Gox repayment event, with the highest slippage increase observed on Itbit and Bybit.” Jeff Dorman, chief investment officer at Arca, compared the current market conditions to the 2009-10 credit markets, noting that market makers have virtually vanished.