Acharya Prashant explains that the root cause of feeling demoralized is the tendency to seek motivation from external sources. He argues that if an external person, object, or situation has the power to motivate you, it inherently possesses the power to demoralize you as well. By relying on external validation or circumstances for energy and happiness, an individual hands over the control of their mind to others, effectively living a life of slavery. He emphasizes that while people enjoy being motivated, they fail to realize that this dependency is what leads to their eventual downfall when circumstances change.