Of course it does. If you would invest right now $1k into BTC at the $600 price and one hour later the price goes down to $20, would it matter? Of course it would.
Although $20 is still a big price when it comes to investing you are still right. It wont matter to other invsstors anymore. Seeing a very large change in price will affect them a lot. They will lose trust in it and they might fade away. Looking for something new.