We are going a long way down now. This seems to be just the start of government regulation.
Being on the speculation forum and setting aside the integral anti-government philosophy of Bitcoin for a moment just so that we can consider things with a cool head, I don't understand why some people think that government regulation will make the price go down (I assume it is the price you are talking about when you say "we are going a long way down now" and not our ethical standards!). I think it is one of the several indispensible keys to making the price go up. Have I missed something?
You have missed that you can not transfer anymore cash to BTCchina. It is not about being legal or not. Now it is just much more difficult to buy BTC. That's it.