Exactly. The massive price surges were based on NOTHING it was literally just one idiot after another lining up and buying the next hot thing because it kept going up. The problem is eventually that has to come crashing down and sure enough it did. I would liken it to the crazed dotcom investing frenzy... many companies' stock prices were driven up to absurd levels and then 'crashed' simply because the level they had reached was unsustainable without continuous investment by new bagholders.
How come shares in companies don't fluctuate so wildly then?
They do sometimes, when there is crazy hype around some new idea or technology or patent etc etc etc. But not as much as Bitcoin. Here's why.
With stocks, the value is based on SOMETHING. You can look at the company's income, assets, debt, patents, leadership, etc to determine what you think its shares are 'worth.' When the price starts to increase, and keeps increasing, some investors will start to throw up a red flag and say well hold on now, why should I pay $20 a share more for this than it was selling for 3 months ago? What has changed - did they suddenly enter a new market, develop a new product, or increase their income? Is the earnings per share higher? No? Then fuck you, it's not worth the current price and I'm not going to be a bag holder. Then the price settles down again.
With stock there are definite levels where buy support will decrease, and levels where sell support will decrease, that tend to be based loosely on various assessments of what a "fair" share price should be. People try to talk about resistance levels and support and all that with crypto but they are just making asses of themselves about 90% of the time. There is a difference between a true "support" that is based on sound investment logic, compared to a "support" that is just based on 50000000 idiots stampeding in the same direction.
With Bitcoin what exactly is the value based on? Who decided it should be worth over $1000? Where did that come from? It literally came from 50000000 idiots stampeding in one direction. Until the last swarm turned around and realized oh shit there's no one behind us, we were the last ones to the party. Now we're stuck holding $1000 bitcoins that aren't worth $1000 anymore.
Why didn't anyone step up and say now hold on a minute, what the hell are you smoking asking $1000 for a "bitcoin," where did you come up with that value? I'm sure some people did, but the fact is that both sides - for and against - have basically no hard evidence to support any particular price for Bitcoin. It's all just speculation and nonsense, like these people that keep saying IT MUST HIT $10000 or IT WILL SINK BACK DOWN To $5! They have no real hard evidence. There is no legitimate way to assess the value of a Bitcoin at present time so it is 100% based on psychology.