PANews reported on July 9 that according to TradingView data, Bitcoin cash (BCH) fell 20% last week, the biggest drop since April. The sell-off came as the defunct exchange Mt.Gox said it would begin repaying creditors for about $9 billion worth of tokens stolen in a 2014 hack, including $73 million worth of BCH, equivalent to 20% of the token's daily trading volume.

Kaiko said that BCH holders panicked and sold in anticipation of a massive liquidation by Mt.Gox creditors, and the poor liquidity (i.e., poor order book depth) of centralized exchanges exacerbated the panic. In a market with poor liquidity, it is difficult for traders to execute large orders at a stable price, and a large buy or sell order may have a disproportionate impact on the price of an asset, leading to an explosion of volatility.

“Looking at BCH price slippage for a simulated $100,000 sell order, price slippage on most exchanges reached its highest level in over a month, indicating that liquidity is deteriorating due to insufficient order book depth for large market orders,” Kaiko said in a newsletter published on Monday. Slippage is the difference between the expected price of a trade and the actual price at which it is executed, and a surge in slippage indicates poor market liquidity and/or high volatility. According to Kaiko, on July 5, the day Mt. Gox announced its refund, slippage in BCH markets on Bybit increased from 0.2% to 2.8%, and slippage in BCH markets on Itbit increased from 0.3% to 3.5%. Kaiko said that the poor liquidity “coincides with the strong selling pressure associated with the Mt. Gox refund event, with Itbit and Bybit experiencing the highest increase in slippage.” Arca Chief Investment Officer Jeff Dorman said that market makers have completely disappeared, similar to what happened in the credit markets in 2009-2010.