The digital currency faces a big Test! U.S. starts to tax, India bans all relevant banking transactions.

India's central bank has banned its regulated financial institutions from handling cryptocurrency operations and settlements for individuals and businesses, analysts said, adding that the April 15 deadline for U.S. tax filings was the driver of the recent plunge in cryptocurrencies, which cost U.S. households $25 billion in capital gains tax on investments in cryptocurrencies last year.

The India's central bank also said that financial institutions that have provided encrypted currency services would have to terminate their services within a certain period of time, which would be announced separately. India's business newspaper, the Economic Times, has since commented that Indian citizens will no longer be able to buy encrypted currencies through banks and electronic wallets.

If the entities regulated by banks and other central banks are not allowed to promote the trading of encrypted currencies, then individuals will not be able to trade their wallets through bank accounts to encrypt money. Also in Thursday, Thomas Lee, head of research at JPMorgan's chief equity strategist and the Fundstrat Global Advisor, said in his report that April 15 this year the U.S. tax filing deadline was the driving force behind the recent sharp drop in currency encryption.

Lee still favors big cryptocurrencies such as Bitcoin. The bear market for other cryptocurrencies is generally over, but not until mid-August.

In the first quarter of this year, both Bitcoin and digital currencies as a whole recorded their worst ever performance, with the market value of Bitcoin evaporating by more than $120bn during the quarter.

The Bank of Japan recently issued a risk alert to investors.

The warning signals a subtle change in attitude from Japan, which has been a bellwether for its currency, both official and private.

Coinmarketcap, which tracks the prices and market values of a number of digital currency trading platforms, shows bitcoin trading at below $6,800 at its lowest price in nearly two months.

Seven of the top 10 digital currencies, including Bitcoin, have fallen in the last 24 hours.