It should be expected that the price of bitcoin be unstable in it's early years. The same is true for most other currencies. It you were to look at a longer term graph, you would see even more instability.

Over a much longer term the price of bitcoin will likely eventually 'settle down' to more normalized levels (be it either higher or lower where it stands now) as more adoption will likely cause the price to stabilize

The prevalent theory is that once mass adoption is achieved and there's like a lot of money into bitcoin, market cap goes to the moon, liquidity will be very high, several financial mechanism will be available to stabilize the price and by then no more volatility.

Think of Bitcoin being a 2 person raft in the middle of the Pacific Ocean, and the current economic and monetary system as a huge ocean liner or aircraft carrier that can't even feel a wave hit them.  That's where we're currently at with Bitcoin.  Wild price swings and lots of volatility.

Once we get more merchant adoption, more investing, more development, more consumers and people using it, the raft or boat will get bigger and bigger.  Once we're at Ocean Liner status you'll see only mild price fluctuations and wild celebrating.