Alexa Rank crashing

I hope this piece of small answer from Alexa will help you out with your query.

How can my rank get worse when my site traffic is getting better?

The short answer is that any ranking system ranks you relative to others. The Alexa Traffic Rank ranks your site relative to all other sites in the world.A good analogy is running a race. Let’s say that yesterday you finished the race in 3rd place. If you race again today and have a faster time, you could still finish in 4th place if 3 other people run faster than you. Even though you ran a faster race, your ‘ranking’ got worse because other people ran even faster.

You can get more info here: ALEXA FAQ's: What’s going on with my Alexa Rank?

Nothing like that CK, the Alexa works on its toolbar downloads

Vijay, whatever I posted was quoted from text on Alexa.com only. I never said anything in this regard. I too have heard that the alexa toolbar downloads plays a role in determining the alexa rank, but, I can't see a change in my toolbar downloads, which is still 1 (only I have downloaded) irrespective of this, I'm able to see a gradual change (lowering) in my alexa rank. (I can't expect my alexa rank to change so much, even if I keep my blog open 24x7).

CK the toolbar with some blackhat SEO methods get you better Alexa ranks(this is what I have noticed) also they lure into free 1 month trial and then post the trial period your Rank goes for a free fall 

CK Not the downloads of your toolbar... if someone has the toolbar installed ( whether it is yours or someone else's ) and visits your site, then the view gets registered.

I think they also use other methods like data from ISP's for generating the stats.