A smartphone displays the Bitcoin GBP market value on the stock exchange via the Yahoo Finance app.

The price plunge came after weeks of rare stability for the world's largest and best-known cryptocurrency. While global markets churned in October, bitcoin traded comfortably in the $6,400 range — a break from volatility earlier this year. Its total losses this year are now more than 65 percent.

The cryptocurrency briefly pared those losses and was down about 7 percent in afternoon trading. As U.S. stock markets closed though, bitcoin was still down 12 percent over 24 hours, trading near $4,299, according to data from CoinDesk.

The digital currency dropped as much as 16 percent on Tuesday to its lowest level since Sept. 30, 2017, according to data from CoinMarketCap.com. Bitcoin fell as low as $4,076.59, bringing its total losses in seven days to roughly 30 percent.

Its epic rise last year started right after Thanksgiving as it began to gain status as a household name. Since then, the cryptocurrency has fallen more than 40 percent. Bitcoin first topped $10,000 at the end of November and made it to nearly $20,000 a week before Christmas as retail investors poured in and two regulated exchanges prepared to launch futures markets.

Bitcoin may be feeling the effect of other global markets sliding this week.

"Markets around the world are fragile, and panic and sentiment are playing a disproportionate role right now," Tom Lee, co-founder of Fundstrat Global Advisors, told CNBC Tuesday. "Does this mean bitcoin is broken? No. The use case is still there, but in the short term, panics are panics,"

A drop below $6,000 earlier and other key technical levels this week triggered "stop losses" for some traders and likely exacerbated the selling. Those technicals "deteriorated" as bitcoin support levels were broken and the cryptocurrency continued to hit lower lows, Lee said.

He also pointed to Securities and Exchange Commission enforcement against multiple cryptocurrency projects last week for the precipitous drop. The SEC announced its first civil penalties against cryptocurrency founders on Friday as part of a wide regulatory and legal crackdown on abuses and outright fraud in the industry.

Reports of possible cryptocurrency market manipulation also piled onto the negative sentiment. The U.S. Justice Department is looking into whether traders used another cryptocurrency called tether to bid up bitcoin prices during its rally last year, Bloomberg News reported Tuesday, citing three people familiar with the matter.

Lee, former chief equity strategist at J.P. Morgan, and others others pointed to a "fork" in the cryptocurrency bitcoin cash. That digital currency split into two versions last week — "Bitcoin ABC" and "Bitcoin SV" — and diverted what's known as "hash power," which analysts say affected the broader crypto markets.

"The 'Hash War' between Bitcoin Cash ABC [and] SV continues to impact the market," said Brian Kelly, CEO and founder of BKCM. "Both sides appear to be selling bitcoin to fund mining operations to win the battle."

The drop also comes on the heels of a warning from European Central Bank Executive Board member Benoit Coeure at the Bank for International Settlements in Basel. According to Bloomberg News, Coueure called it "the evil spawn of the financial crisis," and said he agrees with BIS head Agustin Carstens, who in June called cryptocurrencies "in a nutshell, a bubble, a Ponzi scheme and an environmental disaster."

Clarification: This story was revised to clarify the summary lines that bitcoin has fallen to its lowest level since September 2017.