On September 4th, China announced that it was banning token sales. A week later, rumors emerged that the People's Bank of China had ordered Chinese cryptocurrency exchanges to cease trading. These rumors were confirmed when BTCC announced its closure. OKCoin, Huobi and a couple smaller exchanges announced their closure. The network value of cryptocurrencies dropped from $150B on September 12th to a low of $97B on September 15th.
I believe that the market grossly overreacted to the news which is evident by the sharp recovery. Chinese Yuan used to represent by some estimates 99% of Bitcoin trading, but it has dropped to lower than 20% by. I demonstrated below the diversification of fiat currency trading volume with Bitcoin from August 2016 to August 2017.
I expect China to reverse its decision on both token sales and exchanges as soon as it finds a way to "regulate" them in a way that allows them to preserve capital control policies. My biggest concern with China continues to be the concentration of mining operations there. It's not outside the realm of possibilities for China to "nationalize" mining operations. The decentralized nature of Bitcoin allows it to survive something like this, but would significantly impact prices and transactions.
The cat is already out of the bag and countries can slow the growth of Bitcoin, but can't destroy it. Similar to global banking laws where certain countries like Switzerland and the Caymen Islands are more attractive; I expect this to happen with cryptocurrency laws where countries will eventually compete for the most pro-crypto regulations. Switzerland is already doing this by allowing citizens to pay their taxes in Bitcoin.