After the first version of Silk road went down, the price did drop quite significantly. Investors might just have the mentality that a large volume of Bitcoin was generated by silk road as the adoption rate was small then. It rebounded after that, the second silkroad didn't have much impact likely due to the already high adoption rate and there are better alternatives to silkroad.
The first bust caused btc to drop 30% I think.
I guess the media is somehow right after all on what they keep saying on the news , Bitcoin plays a big part on the Darknet marketplace these days .
It used to be due to its anonymity and anyone could be very anonymous as long as they mine the coins themselves. Not so much now, mixers can't really be trusted, selling and buying of Bitcoin is a hassle process and would usually involve exposing your identity. With the rise in the merchants accepting Bitcoin, most aren't using it to buy illegal things.