Low liquidity is a necessary and sufficient condition for a mega-crash. Low liquidity preceded both Flash Crashes
Liquidity comparison: Then and now:
2010
Black line shows the current trading day's level of liquidity. Colors show historical peak liquidity colored by day of week. Time of day is on lower scale 'x' axis:
Day of Flash Crash:
Several months post Flash Crash. Liquidity had recovered:
Now: Sept. 23rd, 2015: