Actually, crypto market is so volatile that every news can change the price very significantly. But I don't think that only chinese government is guilty for this fall. To my mind, the market was just overheated, so it is a regular correction. Moreover, there are shocks on other markets as well (stock market). It is caused by difficult economic situation around the world.
Yeah, Since it's more volatile and more risky i think government was right to doing some prevention step but i don't think by making it ilegal was an good choice, Maybe Chinese Government can take an refrence from other country by making the crypto as Trading Commodities and not for the payment tools, Beside that as you said current economic situation was also affecting the market so we can't blame only on one side for this matters.