Or alternatively: 3) this will cause prices to start dropping, which increases uncertainty, and causes additional sells. 4) thus we enter a loop where uncerta

Or alternatively: 3) this will cause prices to start dropping, which increases uncertainty, and causes additional sells. 4) thus we enter a loop where uncertainty increases, which causes more selling, which causes price decreases, and the market crashes. Market prices are largely a function of market confidence. If confidence erodes, so does the market. It's how bubbles burst.