Yes that is true. Panic selling and mass selling of cryptocurrencies really hurts the value. Not only that, but because of the decrease in value they are putting traders and investors at a very disadvantageous and messy position. I say if you don't have the guts to keep your cryptocurrencies when the value drops a little then why the hell have you invested on something with a value that is highly volatile in the first place?
Well the only reason it is volatile is because people panic sell (and due to whales and other factors), if less people fed into the panic, the asset would be less volatile.
The main reason for all the FUD, is that a lot of the people that are new to investing in bitcoin, they are not used to the volatility, so they panic and sell, which only further increases the swings up and down.
It is of course not great to see 50% of your portfolio disappear, but to be in crypto you gotta keep a cool head, and at times you just need to hold.