I think it's safe to say that bitcoin isn't going down to 3 digits. There's going to be a ton of buyers at the low to mid 4 digit range that I doubt we're going to see any prices below $2000 consistently as we try to find a bottom at this bear market.
I wouldn't say that bitcoin was defeated as a currency. It just means that adoption has not ripened.
Also, with or without Mt Gox coins being dumped, would you agree that bitcoin's pump had to come to an end one way or another and enter a bearish phase exactly like what we're experiencing now? There had to be profit takers at some point.
Anyways, instead of buying when price is above $10k and calling it safe or buying when price is in 3 digits(which probably will never happen), a more logical thing to do would be buy your way down, split up your capital to buy coins regularly, starting now seeing prices are already decently low.
It was defeated for this moment. Bitcoin lost a battle, not the war. Its a speculative asset right now, but it can become a currency in the future if the market matures.
I'm planning to buy more when it reaches around $2k, which would be a 90% drop from previous ATH. But I can't discard three digits as a possibility, because the volume of Mt.Gox coins is big and can eclipse the market if dumped agressively. But like any eclipse, it will be short-lived.