The main reason was the over-inflated bubble, which everybody knew would burst.

MtGox's server problems were the spark that ignited the powder keg. I had my sell order in at 320 at Virtex which went up to 290 before crashing. Close, but no cigar. Might have missed by a day.

The 6 week downtrend starting in the 130s was completely different. It was sparked by the US DHS seizures at Dwolla and Liberty Reserve, MtGox introducing KYC identification two days later, and the ensuing withdrawal suspension. It culminated with panic selling all the way down to 66 a few days after withdrawals resumed (sort of). The big benefit to Bitcoin was the reduction in market share of the one exchange whose problems had the potential to seriously affect the market. That and the opportunity to buy coins while they were ridiculously cheap.