Is this an algorithm penalty or manual action?

This is not a penalty, I have been hit like this 3 times in two months and the issue is exactly as you told.

It will recover after a few weeks automatically. Don't try anything as nothing will work.
 
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It will help if you add new content and good links to your website. I am not saying to add too many, but a few will help, and wait a while.
Even if your rankings do not get back in the next month- you will have no option other than adding new content and links to your website.
 
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