This is the logic I used to reach that conclusion, please state which part is incorrect if you disagree: My additions in bold:
1) Bitcoin’s main technological and paradigm breakthrough – and the main source of its value is as a fluid currency that allows fairly quick, partially anonymous, and nearly free transactions anywhere in the world with access to the internet.
2) Currently Bitcoin is not being used as a currency – you would be crazy to spend it when its rising so much in value and when you could much more wisely sell it at a huge premium on a local bitcoin marketplace and buy the product in USD instead. Unless you think this might be a bubble, so you might as well spend them now while they are worth extra. Or if you just bought the btc so you could use them as money right now.
3) Bitcoin is rising because people expect it to be a major currency of be worth more in the future and that there will be huge flows from fiat money into bitcoin as financial crisis panic in Europe spreads.
4) Bitcoin will keep rising as long as this assumption gains ground or other reasons arise for using bitcoins.
5) If this assumption fails, and Europe is ‘saved’ (or can is kicked down the road) as it has countless times, new money will stop to come in, speculators will cash out feeling the party is over and price will drop. Unless people really are cashing out of the failing bank system and have no plan to return no matter how much the Banksters try to say they have changed their ways.
6) How low will it drop? Based on its intrinsic value as a currency that it had built over the past couple of years with perhaps an added premium thanks to the extra coverage it got over the past few weeks and new ‘believers’ added to the mix. Huh? I don't think this is a complete thought?
7) Therefore, the true value of a Bitcoin, if financial armageddon doesn’t unfold before our very eyes, should be the value that it had before this whole Cyprus thing + some additional worth based on drawing more loyal users.
The main assumption here is that a lot of the new investors over the past 2 weeks are speculators hoping to make a nice profit, instead of people who swear by Bitcoin as a practical currency. BY the way I’m one to hope that there is some kind of financial Armageddon so don’t shoot me for hypothesizing an alternate scenario.
I think your assumption has some merit, that much of the rise is induced by speculators. But Some of the rise has been because of people who really beleive in bitcoin putting more money into it. You could say the price rises (or drops) quickly based mostly on speculation and equilibrates slowly based on what people are saving in bitcoin and how much it is used for transactions. Whether the price drops depends on whether the users of bitcoin are able to offset the amount taken out by the speculators. If they do not, and the price starts falling, we could see the price overshoot downward and users of bitcoins will get a discount again (like anybody who boutght below 5 USD).