I do enjoy your charts bitcoinBull, nicely done! I agree, price/difficulty is a good ratio to use. Even at $1.00 and difficulty of 100,000, there was still serious profit to be had by mining. I think if we see the ratio drop to 0.5 or below, that's when we'll really see a good portion of the miners drop out.
There is a difference between dropping out and not investing in mining. I need to look, but the last time people dropped out, was there any relation to when GPU mining was introduced? If this was the case, it was the first time CPU mining became unprofitable.
As the ratio gets smaller and smaller, some forms of GPU mining become unprofitable due to electricity costs.
What really is happening is the difficulty is much like a ratchet. It requires a bit of force to turn, but stays at that level. Maintaining the current price in the face of reasonably large inflation (2.75 million coins per year mined!), you need a steady stream of force to hold that up. If that stream ever lets up, the price drops.
As for miners not selling, that's a different market force absorbing (opportunity cost of miners not selling in a way). They are choosing to save rather than "consume" the coins. It's a lot easier to have people hoard the coins than to outright buy them. Eventually difficulty will get to a point where operational costs will force some to come offline. We are a long way from that. The question is how that will affect price. I think you'll see a near constant difficulty ratio at that point (margin increases from miners who have free electricity, perhaps).
