That's what's wrong here. All the little momentum players run away when they aren't making money every minute, and then shorts move in, then the longs cry like little babies and hope someone other than themselves will buy the stock.
Your likely right. Prices are set at the margin. Its the marginal (next) purchase or sale that sets the price. It does no good to own 10,000 shares @ 2 if your not going to keep buying and supporting the price at 12.