Psychological fear does dominate the market these days but not for the reasons you think. people aren't afraid of the price drops because they have not been occurring for a while now. don't confuse the recent rises to $7k+ and come back to $6k bottom as "drops" they are market fluctuation/manipulation for short term gains.
what people are afraid of is what may come next. in other words they are afraid of the short term future because of the incidents that lie ahead. such as ETF rejection. and as soon as this "fear" is lifted the price will rise.
the cost to miners doesn't matter.
it does matter, the same way something completely irrelevant such as Goldman Sachs nonsense matters for bitcoin and the price of it. it is all about speculation and what the investors think. when enough people think the cost of mining matters and is a factor to look into, then it means it matters a lot for determining the price.