$PNUT $ACT $neiro trapped a large number of retail investors.
To some extent, funds do tend to flow to places with more people. This phenomenon can be explained from several angles:
Market sentiment: When a certain token or sector attracts a lot of investor attention, the spread of information accelerates. This concentrated attention often forms a 'herd effect', where investors tend to follow the investment direction of the crowd, hoping to profit from it. This phenomenon is particularly evident in electronic trading financial markets.
Liquidity: Markets with more participants typically mean higher liquidity. High liquidity means that investors can more easily buy or sell assets, reducing the costs and risks of trading. Therefore, a large amount of funds will naturally be attracted to these areas with better liquidity.
The behavior of KOLs: Many Key Opinion Leaders (KOLs) cater to market sentiment. When a hot trend emerges, even if they are not on that bandwagon themselves, they join in the shouting of recommendations, at least to ensure that their 'butts are on the bus'. In their view, participating in a hot market not only has the potential for higher returns but also, through mass recommendations and FOMO sentiment, attracts more retail investors' attention and builds their personal brand.
Think about the situation when $PNUT $ACT $neiro started to surge; funds were rushing in, and everyone was passing the baton.
'Why do cryptocurrencies with more 'retail investors' continue to fall?'