2) When people say they are holding onto their XBT regardless of the price, does it mean that they are just letting it ride and hope it just picks up later?
So for example, someone bought it at $2000 and they just let it sit there even if the price goes to $1000 or $0.01 cents (i know this won't happen but it's an example:) )
Yes most of the optimistic bitcoin holders will just hold whatever amount of bitcoin they have and keep buying more when there will be huge drop in price.
You have to remain calm and don't let your emotion override your trading strategy, don't sell below the price at which you have bought your bitcoins.