Yes It's all because of Google Penguin 1.1 update which was updated on 28th may. If your site rank has gone down then consider below things to get your site ranking in well position: Black Hat Seo - If you are using black hat seo techniques such as keyword stuffing, cloaking, wrong title and meta tag, doorway pages and Duplicate Content then stop it and prepare your site all above things free then fetch website on Google webmaster tools. Paid Links: site ranking can goes down by the paid link also. Wrong Resource optimization: If your optimization is in wrong process, that means getting quantity back link from other relevant resources sites. Create Quality back links not quantity. Do above that mentioned things and wait for few days when search engine will cache your site and after that may be your ranking can comes in well position.
Might be the spam. Please check your website very thoroughly whether your site filled with duplicate content, keyword stuffing, tags.
Why did you stop all the activities?? We do directory submissions, blog submissions, social bookmarking etc. SEO processes to get our sites in top 5 pages of Google. But,such processes should be in limit. If you wanna get your site again up, you will have to continue such processes in a limited way. If such processes are done over the limits, it will result in spamming and that is the most harassing feature for your site. So,it will good for you to do less spamming and well - SEO process.