Bitcoin dropped Thursday to trade below $9,000, a critical level of support that many analysts are watching. The decline followed reports that raised worries about increased regulation in India and potential price manipulation at a major exchange.

The digital currency dropped nearly 13 percent to a low around $8,810 in late morning trading, ET, on Coinbase, the leading U.S. marketplace for trading major cryptocurrencies. Coinbase reported at 11:40 a.m., ET, that its system was experiencing issues with a provider of SMS 2-factor authentication that was impacting "user sign-in, signups, and confirmations for sensitive actions," according to the company's status website.

Bitcoin recovered slightly in midday trading to just above $9,000.