So its acting like the price of a small cap - big deal...
I would say if folks are using Bitcoin as an investment vehicle they are doing it wrong. On the other hand, if they are using it as an easy, convenient, low fee means of conducting a transaction they are doing it right.
The big test here is whether merchants who accept Bitcoin are now going to raise prices by 20%. If not, the latest dip has done nothing to the value of Bitcoin. It has only affected the relationship between Bitcoin and Federal Reserve Notes.