Looking at a chart showing the total network's hash rate is pretty scary. Looks like an altcoin after a huge sell-off. From around 150 TH/s at the beginning of June, the hash rate dropped by almost 50% in July. But it seems to be taking a turn for the better now after reaching a bottom at around 84 TH/s if the data I am looking at is correct.
I don't find it scary at all, it's good news all around. There's now far less of a concentration of miners in China. The difficulty has dropped making mining more profitable for everyone else. The mempool didn't get excessively congested while it happened so fees weren't too bad. Eventually, all those mining rigs will find their way out of China and get redeployed somewhere else.
I don't think the difficulty dropping by this much, or that this much mining capacity going offline is "good news".
My assumption is that the majority (nearly all) of the drop in hashrate is due to Chinese miners going offline and that nearly all Chinese miners have already been taken offline. The CCP (Chinese government) does not like bitcoin because it makes it more difficult for them to control their population, and they have an incentive to harm bitcoin.
There is the risk of a government-sponsored 51% attack. This could mean that you cannot get your transactions confirmed no matter the fee you try to pay, or it could mean that you are forced to pay very high fees that make bitcoin undesirable to use.