We see alot of people holding on the the coins they invest in, either they are afraid to loose out on future gains, or waiting for a rainy day when they can cash out, does this not effect the market with so many coins not being traded, causing the fluctuated trade movements, with people mass selling when the market starts to fluctuate?
There is nothing wrong with hodl strategy, it's in fact one strategy that all agree upon, and it is the most common advice given by newbies and pros. Bitcoins is and has always been for the long term, short selling bitcoins is equivalent to firing a gun at yourself, hoping not to injure yourself.
The crash in bitcoins prices is not effected by the fact, that few 1000 people sold their coins this downfall in prices is called dump strategy, wherein group of people dump bitcoins to break their prices, it's pertinent to note that this dump is done in huge numbers and not a few hundred bitcoins. So my advice would be to hodl.