Super btc, thanks a lot.
And to be clear, I do not say prices can't be driven in a certain direction. What I am saying is that this was a typical action that exchanges enable.
In normal stock markets, you can always buy up the value of certain stocks that are illiquid. But then the decisive phase comes aftwr: Either othere people jump on the bandwagon and prices stay up and move higher, or the next trade will be down again and then nothing happend (except of you losing some money).
As you can see on BTC/USD, the price has stayed up, which means we saw a decent rally, with rising volumes, which is a healthy sign. There were previous price spikes caused by some few individuals which were not sustainable, but this one currently is.
Overall, the market moves in a very similar fashion as stock markets or forex markets.
If you want to know how the market can be "manipulated", this is quite easy. If you look at the order book https://mtgox.com/trade/history
, you see how much money it takes to move the market into a certain direction. This is not 100% accurate as there are dark pool orders on top of visible orders.
In any case this is a good overview.
i.e. you need:
on the upside
6 $M to break 0.90$
18 $M to break 0.95$
21 $M to break 1.00$ (parity
36 $M to break 1.10$ and make a new all time high
on the downside
4 $M to break through 0.8$
9 $M to break through 0.7$
This means that the small size of the market enables big price moves with low funds. On the other hand, this will change with time. Once BTC economy will have moved from 5 $MM to 50 $MM or 500 $MM, you need much more funds and market will be much more liquid.