There are traders and investors. Steem that is not powered up does not receive interest and does nog give voting power. There is a price to this. It actually costs money to keep your Steem just as Steem.

With there being more liquid Steem available then before a higher percent of the market is basically saying that it is currently more profitable to trade than to power up. Or they do not know what to do with the Steem Power.

This ecosystem is quite new and a lot of things are still being figured out. Aside from self voting it is quite difficult to just start turning your voting power into more Steem. Traders are mostly looking for short term gains while investors buy up the lows and are currently stabilising the price around $1.

I personally think this $1 mark is the rough bottom for the new run up. Maybe starting early next year after the release of the smartphone app, HF20 and SMTs

If you look at the total market cap over time you see that there was an inital hype and after that the pice bottomed out and stabilised and go for another cycle, with a higher high than before and a higher bottom then before. This cycle will repeat itself over and over and is based on human emotions