Recognizing that spikes can be caused by unmet demand helps traders avoid costly 'chaser' behaviour and better assess liquidity and risk during fast moves. For markets and businesses, it highlights how limited supply can create misleading price signals with real volatility consequences.
The video explains that sharp upward moves in prices often reflect intense unmet demand rather than a flood of executed purchases. Observers chasing the move may rush to sell when prices fall, amplifying volatility. The speaker uses a supply-shortage analogy—few units and many bidders—to show how bids can escalate rapidly without anyone actually getting filled. The takeaway is that apparent momentum can be illusory and driven by scarcity, not broad buying interest.
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