This kind of volume is just the buying/selling from Bitcoin transactions.
BitPay accepts Bitcoins for businesses, turns around and sends them the USD/EUR/ETC... For the most part they sell those coins right away (or risk losing money). I'd think it would be too risky to hold coins, the market goes the wrong way they could lose their ass. They need constant fiat to be sending back out to the businesses accepting Bitcoins.
Regardless, there's lots of these places that need to buy/sell constantly during the day. At this kind of volume, it's just Bitcoin transactions. It's hard to read much more into it at this point.
We've had some pretty violent corrections, people who really wanted to get out, have gotten out. People who really wanted it, have gotten in. Lots of people waiting for a drop to get back in. Lots of new people waiting to see if this price holds before buying. I sense a lot of "wait and see" right now in the market. MtGox hasn't even discusses the DHS issue. It looks like we're primed for an uptrend, but it's probably not going to be the rallies we've been used to seeing.
Of course if a few whales decide to drop 5-10M buying up coins all bets go out the window. But right now no one is in a rush to sell, no one is in a rush to buy. Ahhh stability.
BitPay accepts Bitcoins for businesses, turns around and sends them the USD/EUR/ETC... For the most part they sell those coins right away (or risk losing money). I'd think it would be too risky to hold coins, the market goes the wrong way they could lose their ass. They need constant fiat to be sending back out to the businesses accepting Bitcoins.
Regardless, there's lots of these places that need to buy/sell constantly during the day. At this kind of volume, it's just Bitcoin transactions. It's hard to read much more into it at this point.
We've had some pretty violent corrections, people who really wanted to get out, have gotten out. People who really wanted it, have gotten in. Lots of people waiting for a drop to get back in. Lots of new people waiting to see if this price holds before buying. I sense a lot of "wait and see" right now in the market. MtGox hasn't even discusses the DHS issue. It looks like we're primed for an uptrend, but it's probably not going to be the rallies we've been used to seeing.
Of course if a few whales decide to drop 5-10M buying up coins all bets go out the window. But right now no one is in a rush to sell, no one is in a rush to buy. Ahhh stability.
What you say is theoretically correct, but in practice I think you are overestimating a bit the volume of Bitcoin business transactions. Check Bitpays recent history: during their best month they managed $5.2M transactions in Bitcoin... And those where 99% buys from Avalon batch #3, which was sold through them. IMO this means that the rest of business transactions in Bitcoins is a peanut, I would be very surprised to discover that Bitpay accounts for more than 5% of the daily volume we had during the last days.
In fact, I bet that Silk Road merchants generate more volume in exchanges than Bitpay (if you take out the spikes in orders to BFL/Avalon).
+1
But not the merchants , the buyers

Most of the merchants hold down to how much they can , waiting for a new spike , just like anyone else.