Traditional traders use a stop loss at 5-10% below the current price. A downward push of 20% can make all the stop losses pop and that cascades into an avalanche...
Leveraged traders use a multiplier which means they can get in a forced liquidation situation.
Going short can cause liquidation when price rises...
Many more of these killer events...
This is true only for the margin trading stop-loss orders.
All perpetual contract futures, which have billions in daily volume, are trading 'on paper', and the avalanche would affect only the specific contract and for a short time. What could affect real trading is that many traders use futures contracts to indicate what will follow on margin/spot trading.