The theory's going around, but it doesn't ultimately make much sense. Algorithmic trading is still set up and managed by humans on a day-to-day basis, so it can't by itself explain persistent market highs.

If people defer to the algorithm instead of sanity checking it the explanation works, but you're relying on some willful ignorance on part of the traders. Or perhaps massive disconnect from reality.

“ only takes a small number of real humans doing unusual trading activity for markets to move” - WHAT? Link? Proof? Obviously false unless “small number of people”=folks like Buffet

I think the concept is similar to how BTC (and other crypto) have major price fluctuations that get reported and acted on via liquidity from a vanishingly small proportion of the actual total BTC. There's reasons, differences, nuance, etc, but I think that's where the thought starts.

If most capital is in rarely-traded funds (I think 90-95% are passive?) then by definition those last 10%-5% active investors are going to set the market, at least in the general day to day.