Why have prices fallen so drastically around October 2011? Any idea why bitcoin prices have fallen so in September and October of 2011?  It seems like back in August, one bitcoin cost about US$17, whereas in late October, it's just somewhat over US$2.
One thing a lot of people fail to notice is the decreasing volume at the exchanges. If we look at the USD volume - and not at the bitcoin volume, which is misleading because bitcoins are now worth much less - we can see a spike in June and a decrease afterwards:



The news reports in June attracted lots of people who were curious about bitcoin. A part of these people left and the market size is now coming back to April/May levels. As a consequence, there is much less money being traded. However, we still have 5 new coins being produced every minute and lots of miners who want their invested money back.
The current price is a natural consequence of high supply and low demand.