Quote from: Charm Quark on April 09, 2013, 08:14:33 PM

Except there is no gavitational attraction between the price of BTC and the number zero. I hate clumbsy analogies so much because lead you to think you undestand something, when really you dont

I believe that number last time wasn't zero, but 2! A drop of around 95%. If history was to repeat itself, that would mean Bitcoin going down to ~$10 at current prices. Or if ti Bitcoins go to 500%, a 95% hit would take it to $25. How would you like those prices?

Ultimately, nobody really knows (or very very few people know) what the main or crucial driving forces in the Bitcoin market are and everyone is allowing thier emotions to bias their thinking. Whether a person is already up 1000%, and is growing increasingly risk averse, or whether they dived in at $150, and are anxious to get a slice of the exponential profits that the early adopters have gotten.

No, thier is no gravitational force attracting Bitcoin to zero. What there might be is a lack of people willing to buy Bitcoins at any given price. Say this price is $500, and even the most risk taking/avaricious investors into Bitcoins, are getting itchy hands and are thinking that they really have maximised thier profits, and start selling. Then the price goes down, but with the already insanely exponential increases in Bitcoin, no serious money is willing to enter the market even at the marginally reduced price point resulting from the early sell offs, which leaves the Silk Road punters which presently represent about 0.01% of the Bitcoin market in terms of volume in USD as the core group of steady Bitcoin buyers. At this point supply far outstrips demand, and we have a glut of speculators who have either made 2000% profits and are looking to maximise their gains sensing that the game is up. We then have a landslide in the price of Bitcoin. With no clumsy analogies applied, this is typical of any commodity market that experiences mass exponential price inflation whilst the fundamentals that underpin that commodities value remain essentialy unchanged (i.e. experience only steady growth as opposed to exponential growth).

Of course, all the above only applies if the Bitcoin bubble were to be of the honest variety without any manipulative hands involved. Considering the weighty and indeed revolutionary implications that Bitcoin could have for the current global political and financial establishment, I think it is highly unlikely that the current monetary lords would be happy to leave Bitcoins to naturally grow. They can flatter the Bitcoin market to giddying height, before pumping it up the ass, and make decent gains in USD doing so, ensuring that Bitcoin can never be seen by the mainstream as a true alternative currency.