Price drop was most likely caused by cascading margin calls.
As exchanges add more sophisticated features (such as trading on margin) amateurs continue to suffer and learn expensive lessons.
Many Bitcoin advocates will heave at the idea of any form of regulation, Bitcoin unfortunately appears to be most attractive to libertarians. Yet their fellow advocates are suffering all around them for it. As an example, any leveraged trading instrument regulated by the FSA in the UK is plastered with warnings about leveraged trading, in a (admittedly probably lacking) effort to warn amateurs of the dangers. I see no such warnings on Bitcoin exchanges offering leverage.