Many people who lack understanding of the market and prefer to believe every rumor in the decision to sell Bitcoin that they had made it up because they are afraid of pricing conditions deteriorated but notice that the price of Bitcoin could rise again in the future.
Those people surely are not patient upon seeing the price to fall and they will do the same thing as those dumping people did. Because they fear that probably the price will go further to fall and they don't know too that it can do come back on higher price so instead of just holding, they do panic selling. I'm one of them before.
Panic selling just would never stop at any price of bitcoins. There are people who do not have a big heart and seeing a small burst of selling and dumping, they will sell their coins too thinking it will dump more. Panic selling is what actually the bitcoin manipulators take advantage of and they buy those panic selling coins cheaply and then again make the price rise.
In my opinion, I don't agree that "manipulators take advantage of the panic selling" because the manipulators always do it first to create a false alarm to real investors so they can manipulate the market and get those dumps or sell offs by the real holders and that is how the manipulators generate profit. Manipulators are too smart and they play the market well enough to engage any kind of hype.
I believe you refer to the insiders, who get the information before the ordinary investors, and in that way have the ability to buy and sell at much better rates. In this case, I think insiders and manipulators may not necessarily be the same ones. The manipulator can be a market maker, someone with a lot of Bitcoins and who works in a coordinated way with other individuals to change the direction of the market.