Yes you are right, people may sell their bitcoin in less value time because may be they think that its price will go more down and will have to face more loss. So they sell them in less value and don't wait for the price rise. But it is profitable to hold the bitcoin when the value is less.
But I think some people need money, so they sell bitcoin and they do not even have any other investments and they do not have any idea that bitcoin is up or down but yes, yes You are also telling the fact that they do not see their gain and losses and sell bitcoin but now the bitcoin earnings are good and are also going to increase.
Yes, selling Bitcoin is a correct choice only when you need fiat urgently. In other cases, it is better to hold all BTC coins and wait when they will go up.