Quite true BUT consider the idea that people engage with this industry when there's a hype or news positive towarda this industry. This somehow breaks the idea. Perhaps right now, many people are just observing how the market will behave on the next days to come. They qon't continuously engage to this industry in a consistent manner. Domino effect is more obvious; market prices will be hyped then possible investors will be interested. Consistency still is lacking simply because volatility is its nature. Profit from riding the waves, is simply the idea which keeps investors coming for it. If we would based on its long time run, then that is indeed true; the market price is continuosly growing.
While there are definitely lots of speed bumps and hurdle along the way, it's technically still a positive feedback loop when you stretch it to a longer time frame. We can't really expect markets to act efficiently all the time; there will always be overhyped events, black swans, fear, etc. It even happens to traditional markets whereas both overly positive or negative events can be taken advantage of.
In other words it's a network effect, which works with more people joining the network because others are using Bitcoin. Quite true, the market can be manipulated with pump and dumb to attract investors, it still zeros down with the fact that investors are just concerned about a progressive market. Neglecting the negative feedback caused by real life events, which can be taken as a plus to profit from while waiting for the market to stabilize again. In 2021 I've not experienced before the high rate of people that got interested in Bitcoin just in few months that it held at 50-60k. A good example of what positive feedback does and how it helps the value if Bitcoin.
I don't know about Satoshi being into neurology and stuff, though, as this seems to me that it's a basic understanding of economics that accounts for human actors and their motives. I also wouldn't concentrate on the idea of a feedback loop and its origins here, to be honest. To me, it's just a phrase to help others understand how Bitcoin's value can grow with the growing demand.
Indeed, Positive feedback loop is an example of what Bitcoin looks like which Satoshi used as a term to help people understand better, but he didn't just say it without defending or backing it with subsequent explainations on the network. So, I guessed not sure, but from his level of actions and innovation you would notice that he is a man with not only high IQ but he has a good level EQ. If he can understand how the people behave and created an e-currency that'll work in relation with the human attitude and how the body works, he must have done a good research on the human brain before embarking on his journey. Definitely, Bitcoin works in similar ways how feedback loops operates in the human body.
It's my response.