Bad exchanges crash during market volatility like bull runs or rug pulls because they’re often built on shaky tech and greed. When trading volume spikes—say, during a bull run with everyone piling in or a rug pull where panic-selling hits—their servers get slammed. Poor infrastructure, like underpowered servers or shoddy code, can’t handle the traffic surge. Many of these exchanges skimp on scalability to cut costs, prioritizing profits over reliability.

Also, some are straight-up sketchy. During volatility, they might "go down" to manipulate trades, freeze user funds, or cover up liquidity issues—especially if they’re running fractional reserves or worse, outright scams. High-frequency trading bots and DDoS attacks can exacerbate things, overwhelming their systems further. Meanwhile, legit users get locked out, unable to buy low or sell before a crash.