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June 12, 2011, 07:20:54 AM |
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Re-posting inside newbies, so that more people can comment.
I am no trader, but it makes sense to me that many miners or early adopters were waiting for some round number to cash out, and it happened that 30 dollars caused some wealthy bitcoiners to sell massively. Remember that the nature of bitcoin is a bit strange in that the early adopters got massive amounts of bitcoins at practically no cost, so this gives them incentive for selling massively at some point to get filthy rich. When they decide to cash out, massive price drops are to be expected. This in turn caused many other miners and scared weak hands to sell also, and the price to drop further.
If this theory is right, we should be just in a healthy correction, meaning bitcoins are changing hands from a first generation adopters owning dirt cheap bitcoins in massive amounts, to second generation adopters, owning less amounts of relatively more expensive bitcoins, and should see the price start rising again soon. The more early adopters sell their massive amounts of bitcoins, the healthier the bitcoin economy will be, because people who buy at higher prices dont have so many bitcoins, and are expecting to see more profit before voluntaily selling.
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