Wow that's crazy. I guess the market depth at BTC-E wasn't large enough to handle some large panic sellers or something? I mean, who actually puts in sale orders below $200?
fake market depth. the seller probably thought there was more, so just put in $100 in an attempt to beat the panic selling. Bots will have placed small "alert" bids, that when they are hit, their larger bids are pulled, this left a weak market with a large sell order crashing through it.