Willy Report

We have to remember that for every bitcoin sold (at any price), someone on the other side of the transaction is still buying those bitcoins.

Actually, "an exchange made it look like someone bought a coin." https://willyreport.wordpress.com/

Bitcoin probably can't ever prevent good old insider manipulation, because every exchange affects every other exchange due to arbitrage. A price jump of $20 on BTC-e will swiftly travel to Bitstamp and everyone else. So if BTC-e decides to do something similar to what Mt. Gox did, there's nothing stopping them. All it takes is one shady popular exchange.

Bitcoin's dependency on exchanges is its greatest strength and weakness. Without exchanges, you probably wouldn't be able to sell bitcoins locally except in a sporadic way. There wouldn't really be an agreed-on price. But with exchanges, herd dynamics are always in full bloom, and you won't ever escape them.

EDIT: People buy and sell bitcoins at current market rate, and current market rate is defined by exchanges. That means if an exchange decides to make their own price artificially jump up, then everyone else's price will jump up too. That means bitcoin's price will be defined partly by whatever insider manipulation is going on at the time.

It's possible that similar things could be occurring, knowing bitcoin, probably expected.

One thing to note is that the vast majority of "mainstream" interest and institutional investment came about because of the surge in pricing caused by the willy bot[0]. People saw this and interpreted it as broad-based interest and demand for btc, while the actual situation was more about a French Jewish Japanophile, deploying some shenanigans in an unregulated market trying to get the head of his embattled exchange business back above water.

So in a way the willy-bot situation has triggered all the subsequent irrational exuberance.

[0]https://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/

That assumes there's an immediate withdraw method on the exchange with higher rates.

MTGox abused the latency of withdraws in an attempt to attract BTC desposits (after their original deposits were stolen) on their exchange and presumably sell those back for cash via other outlets to slowly pay off customers and appear solvent.

MTGox also manipulated the market with trader bots.

https://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/

https://www.theguardian.com/technology/2014/may/29/bitcoin-bots-bought-millions-in-the-last-days-of-mt-gox

Since it has such low liquidity, it is also manipulated to hell and back by various bots, exchanges, scammers, etc. There was an article floating around that showed most of the last price rise was beside of a bot operating on MtGox:
http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/

Nothing is stopping another exchange or malicious person from doing the same thing.