A black swan event is an unexpected incident that goes beyond what is generally expected of a situation and can have serious implications. A black swan risk consists of three characteristics: rarity, tremendous effect, and retroactive prediction.
There are several causes of black swan events, including regulatory constraints, unexpected economic shocks, liquidity issues, insolvency, and so on. Because of the liquidity issue, the bear market is prone to black swan events. Nonetheless, black swan incidents can be beneficial. During a bull market, crypto assets typically experience large bubbles; black swan occurrences are beneficial to the price returning to its true worth. After a somewhat sideways period, assets will be unloaded and the price will return to normal.
When there is a shortage of currency or "convertible to cash" assets, a crypto liquidity crisis occurs. If you have crypto assets on the exchange, they must be able to fund all of your transactions, including fiat deposits, crypto purchases, trading, and withdrawals. However, if there are insufficient cash or resources, it becomes a serious problem.
What happens next in the event of a liquidity crisis? A lack of money, in the worst-case situation, indicates approaching insolvency. Even if there are no visible warning signs that a liquidity crisis is imminent, investors should be prepared for the worst. You risk losing money on these exchanges if you are unable to remove your assets.