Yes I think that too. The low market cap does affect the prices more percentage wise.

Our tendency to treat bitcoin as a buy and sell asset contributes towards it's volatility the most. Once people recognize it as a store of value, they would appreciate keeping their wealth in it rather that fiat.

Third factor could be that at large Bitcoin is not treated as legal tender. To buy we cash in the crypto to get fiat and use this fiat for purchase. The idea itself (legalizing it as a tender)would stabilize the value to some extent as well.