in theory each exchange should be separate and priced at its own userbase's thoughts on the value. but the reality is of the 'sheeple'.

we seen in in november, when the china market that was completely detached from the western world where the arbitrage opportunity was so bad that it would take a while to move fiat from american fiat to china fiat. yet the westerner exchanges such as bitstamp etc were simply sheep following the china price purely because it was going up, not because people were arbitraging between bitstamp and china exchanges to cause proper and real reason for bitstamp to go up.

the same is happening all the time. if one exchange moves drastically in a certain direction, due to one persons dump or megabuy.. the other exchanges follow the price even if no fiat or bitcoin is being arbitraged between the exchanges.

i found it funny, especially in february where mtgox was pretty much locked in, no FIAT or bitcoin was moving in or out, yet people were following the price downward. it took about 10 of us to be spread out on bitcoin chat's and trollboxes to be repeatedly telling people there is no point in sheep following gox, before they realised it..

some people are just mindless and panic/excited about events that have no physical impact on them but they will follow along anyway, purely because they do not know what else to do.

what it should be is that each market is separate where for instance if i am the only local bitcoin owner in my area and lots of peoplenear me wants bitcoins then i could and should be able to name my own price. (within reason) rather than m sticking to a price thats based in a totally different country.

there are too many people selling at a loss purely to stay within the sheeple mindset of a fixed price. when people start to realise that the world is not a fixed price and fiat is also volatile. they should hopefully get out of the sheeple mindset.

after all we can all go to 2 separate super markets and see that a loaf of bread is $2 in one store and $2.40 in another. the world of bread, milk and baked beans is not fixed at a single price. rent is not at a single price, so people need to wake up that FIAT is just as volatile as bitcoin, and infact the FIAT pricing of groceries and rent is more decentralised than bitcoins with a difference of in excess of 20% from state to state, country to country

If I ran an exchange, I'd program it so that no orders could ever be entered lower than the ATH. Want to sell at a loss? Go to the Moron Exchange over there >

It can't be fixed because bitcoin is too easy to move around. You can't move even one piece of bread or even money to the next continent for $0.02. The problem is that people are not selling bitcoins because there are bad news but only because someone else is doing that. And thats stupid. Why people buy them if they don't trust this technology and can be scared only because someone bought something for btc? Maybe they will learn one day ...

Ultimately I think problem will solve itself when there will be no need to exchange bitcoin and people will be using only btc.