Impact of Algorithmic Trading on Equity Market Volatility

In recent years, algorithmic trading has dramatically transformed the landscape of equity markets. It employs complex formulas and algorithms to execute trades at speeds and frequencies that human traders cannot match. However, algorithmic trading also raises important questions regarding market stability and fairness.

Given this context, consider the following scenario: A hedge fund utilizes an algorithmic trading strategy that places large orders for a thinly traded stock. As a result, the stock experiences a significant price movement due to the sudden influx of buy orders. Which of the following statements best captures a potential consequence of this algorithmic trading action?