A simple way to think about this: everyone in society has a portfolio of assets, they allocate to that portfolio based on risk/return/liquidity/etc, and the most important ratio here is cash to assets.

At this stage in the cycle, perceived risk is very low, expected returns are very high (some of the stuff you read on this is next-level crazy, ppl saying they are guaranteed a double digit real return from equities), and so no-one wants to hold cash...any cash. They hold very low levels of cash relative to total assets.

At some point, this will change. Cash % of assets is basically stationary (to some extent, the mean % has probably trended down this decade slightly though). Large-scale fraud will lead to a re-examination of the relative reward of assets, actual losses mean that your ratio of cash to assets drops, and people sell to either increase liquidity/panic/etc.

Bubbles sometimes deflate slowly, most often they do not because people aren't rational. If you buy into a stock expecting to sell it someone else at a greater price, what do you do if you wake up one morning and it is down 20%? You get out. There is no reason to hold it. You can't earn fundamental value at that price. This is happening in multiple stocks, margin calls, brokers start liquidating client portfolios en masse...you get the picture.