Liquidity Crunches are a Situation where perceived or beliefed immaterial value carriers, cant be used as value carriers anymore,
they caused the financial crisis 2008, in this situation, loans, stocks and debt, of american loan takers werent considered valuable between banks anymore and they stopped trading them, this caused in the end the other banks insolvent because they werent able to liquidise debt zertificates, (because those value papers became empty)
i am currently looking at tidex, and there are folks that want to sell their less common cryptocurrency (medium known waves, or even worse, like MDS, LIFE) for a more publicly known one (like ethereum or bitcoin) because those have a wider acceptance.
because they have been basically called by an ICO (Currently SNOV, Dragonchain), with public exchange data, marketing and propaganda and profit perspectives of 300% per day
and now they realise they cant sell for the price they want into a more established cryptocurrency, because the entire market is profit oriented and only wants lower prices, and then sell more expensive.
this could create a hellhole of an economy. and a vast crash with thought billions being lost. and many loosing everything they own,
but it could also cause a price fixation and a price explosion for the "stake" cryptos that have for whatever reason a better publicly known situation (ethereum, bitcoin)
regards