Earlier I started a tread (http://forum.bitcoin.org/index.php?topic=17318.0) about how price and bitcoin's google trend numbers are highly correlated. The only big price drop in the past was paired with a drop in the trend. I decided to see how well the current "crash" matches up with bitcoin's google trend numbers. It turns out, that the correlation still exists very strongly.

Image Below:



The blue line is the google trend line for bitcoin, roughly scaled to match price. You can see that if we assume bitcoins popularity is the main factor driving price, that the current price is justified, and in fact, (I have to say it) lower prices might be seen.

I know that correlation is not causation, but clearly there is a correlation here. It seems intuitive to me, since bitcoin is a lot like a commodity, that the number one factor driving prices is demand. Demand seems like it can be roughly estimated by getting an indication of interest, which is what google trends gives us. I think that assuming at least some causation is prudent.