Is this latent damage from the IRS ruling or something? I don't know why I'm still surprised by sudden, massive movement in BTC price, but usually the reasons seem pretty obvious (and over-reported).
China is cracking down on exchanges by forcing the state-owned banks to close their accounts. That is the speculative force that is driving down the price.
It is good that the price is going down since more people will buy Bitcoin now.
Personally I think its more a reversal of the "hype" valuation of bitcoin. For a while it was in the mainstream media all the time.
Also, probably more importantly, Mt. Gox was constantly pushing the prices higher because nobody could withdraw USD, so the only way to get out of Mt Gox was to use all your USD to buy bitcoins and then transfer them to another exchange.
