[awb]

There are a few strategies that might be in play: sentiment analysis and technical analysis. Sentiment analysis does what you describe. Technical analysis is similar, but only looks at price movement and attempts to either follow or buck the trend. In these examples, a social media post could push the stock from $0.0001 to $0.0002. Maybe a sentiment algorithm sees the positive post and a technical analysis algorithm sees the positive price actions and confirms the upward momentum, triggering a purchase that moves the price to $0.0003. That 300% gain gets noticed by others and so on.

Algorithms are really just a digital manifestation of group psychology. The same thing happens in a run on a bank, or a Tulip bubble. Word spreads and others follow.