1) Any reason for your first assumption?
2) Why on earth should the Chinese government outlaw Bitcoins? It's a gift from heaven for Chinese economics. It might get like the nuclear bomb of international economics.

I don't follow that logic at all.  Why would it be outlawed, and even if it were, why would that create a crash?
Why wouldn't they do the opposite and encourage it?
You are familiar with their position on WoW gold?

I am not, please elaborate.

30 bucks until 2x old ATH

the lack of volume pushing us here is disturbing.

at the april peak, the volume was like 10 times bigger but price only doubled...
so I'd assume maybee half the volume of april would be a good thing?

does stamp trade in euros?

Encouraged...
They even made prisoners play Warcraft to sell the gold.
Here's an article about the Jixi labor camp.
http://www.theguardian.com/world/2011/may/25/china-prisoners-internet-gaming-scam

The US classifying Bitcoin in the same category as WoW gold was a green light to them.

1.  I have no proof.  I have no secret source from China.  When I read things in the lamestream media, I try to read between the lines.  I try to figure out what facts they started out with before they started their garbling and slanting process.  I'm guessing that they saw reports of high volume at BTCChina and falsely concluded that this must necessarily mean there is high buying demand in China.  They probably don't know about the 0% commissions, or don't understand that it would lead to a heavy volume of speculative day trading.

The burden of proof lies on the one who asserts the positive, and I have seen nothing outside of MSM reports to suggest extraordinary demand from China.

2.  The Chinese government believes in tight capital controls and has already outlawed other non-government currencies.  The best predictor of future behavior is relevant past behavior.

These days it is much more difficult to estimate volume. More exchanges, some have free trading, much more opportunities to trade extra-exchange etc. I am not worried about that, it is a different game now.

But - It is true that exchanges are now very vulnerable to engineered crashes. BTC10k market order would take Gox down by $100 (20%). If topping the April rally took a million bitcoins as some claim, now BTC100,000 is handsomely enough. Exchanges still gauge the price despite their low share of the total volume.

Conclusion is that you should never sell to sinking or low prices. Only sell high, if ever. That keeps the manipulators in check, because they cannot be sure to be able to buy back cheaper. Also you have no chance to ever lose.

Any longer term (6-12 months or longer) it matters absolutely nothing at all what kind of boom or crash there is in between. Bitcoin's viability as a technology is not dependent on that.

Oh Nostalgia I remember that very well...

http://www.youtube.com/watch?v=rkRIbUT6u7Q