we might see a downturn for a while but I don't think it will effect the price as badly as people are expecting... Yes, alot of bitcoin is mined out of China - that's the one thing that scares people.
Chinese bitcoin exchange volume has been pretty miniscule since Jan 1st, 2016... the vast majority of the rise happened AFTER chinese exchanges were forced to stop no fee trading and alot of their fake volume antics stopped at this time as well.
The last rise had larger momentum than the last, this indicates to me that it isn't over yet despite all of the panic at the moment. The rise from $1000 to now was extremely fast and there wasn't a real correction until now.
The only "if" right now is what is going to happen to the miners, how will they sell their coins and will they still be able to remain as active in the mining community?
This is big, but it's not MT GOX losing 1 billion dollars big... it's not losing the largest exchange by volume big... and it's not "bitcoin is banned" from one of the largest bitcoin trading countries. For the last year, Huobi/OKCoin/BTCChina added together has only been around 20% of bitcoin's total trading volume. If it was 50%+ I'd be more scared. More volume is coming out of other countries now, countries that have decided to embrace bitcoin and don't have so many capital controls in place.
In reality this could be a good thing, it could be the end of an era where Chinese exerted major control against both the price & hash rate of bitcoin, though I highly doubt they will give up their mining dominance.
Bitfinex is the clear winner by volume for the last 6 months... I'd be more worried about them shutting down. They pretty much do enough volume to cover all 3 of the chinese exchanges combined.
https://data.bitcoinity.org/markets/volume/6m?c=e&t=bTLDR: China didn't have much to do with the 1k-5k rise in the first place.