Lately the bitcoin market has housed a palpable energy and exuberance that, to me, felt dangerous. People have been panic buying and driving the price up. The panic was a physical presence and was fundamentally flawed. The last time this occurred in the bitcoin market was in April and the cold dose of "wake the hell up" came in the form of technological market manipulation carried out on MtGox. The ensuing crash was an over correction and the market took a while to stabilize again. The danger that I have been feeling with this market is that someone would again pull a manipulation and send people into a state of panic selling. Fortunately the energy seems to have been released in a more stable way. There was a final state of euphoria as the Senate hearing on crypto-currencies showed that the US was going to be shining a favorable light on bitcoin. The regular market timers saw this as their cue to take profits from the new comers and many probably bought back in during the crash effectively stabilizing the price.
It should be noted that this "easy landing" saw a high of $900 and a low of $500 in the span of a few hours. This is the world of bitcoin where a 45% correction is considered a normal boat rocking and not a capsizing.
Also to be noted is that amidst all this chaos, Bitstamp suffered closure from what was probably a DDoS attack. No doubt the work of some opportunists but I doubt it really paid off for them like the April attack of MtGox did for the previous attackers. Between April and November, we have seen an incredible diversification and maturity in the bitcoin community and this market reaction appears to be the proof.
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