When the token circulation is large enough, then you need to have a large amount of liquidity to avoid falling prices, no one can control the price of tokens in the market, but too many tokens are not good for the price of tokens in the future.
Falling prices for every project are unavoidable. You will not know when they are about to fall but having these factors like the circulating supply and its market cap will give you an idea of whether to proceed to invest and hold it.
therefore tokens need to have a max supply
Except the meme coins that has unlimited supply and that determines the price for each of them because if a project has a limited supply, how much it got can easily be computed and you'll project the future price of it, market cap and your potential profit. I am sure that many does that before they invest.