Confidence is what gives any currency value. If everyone suddenly stops desiring a certain yellow, shinny, rare metal, the value would plummet, because the commercial use of this metal has a lot less value than its desirability. If banks start to value packages of sub-prime mortgages, they gain value as a currency and can be traded and sold, but if confidence is suddenly lost....
The bitcoin price will readjust (possibly sharply) when more people decide to sell than hold or buy, and confidence will plummet from there as everyone tries to lock in their gains. Until, that is, enough people decide it again posses an opportunity. It is all about confidence. Nick.