Quote from: txoomy on April 09, 2013, 06:08:52 PM

What causes the price to drop?

If many people sell at once the price will drop - is what I hear, but if people are selling, aren't people buying those same BTC?

If you look at Mt. Gox or VirCurEx then you will see there is a sell price and a buy price. The sell price is what people will buy them FROM you. The buy price is what it will cost FOR you to buy them. There is a gap between these two numbers.

There is a limited number of coins at each price. So if the minimum buy price is $200 and I buy all the coins that were priced at $200, the price will go up to $201 (or whatever the lowest buy price is).

If no one is buying at the $200 price, eventually someone will try to sell at a lower buy price.