The reason behind panic selling is that people lack patience and they get panic when they see price going down and start selling their coins at cheaper price and I think that is the time when we should hold our coins tight and wait for the price to bounce back again but generally people doesn't follow this simple rule.
It is not the patience that triggers panic selling. It is the lack of knowledge on what it is their holding. Lack knowledge meand lack of faith, and lack of faith means easily get shaken when dumps occurs, may it valid or fake dump. So the first move this people who lack faith is to sell their holdings the soonest the can.
Lack of patience could be one but the root cause if lack of knowledge because if one is knowledgeable he will not be affected easily with this bad news that will cause panic selling. It's normal to see a dump and everyone has their own decision on that given situation, but smart people would never panic.