I think this trader panic is new traders who do not know how to do good and right trading so they choose to secure their assets when prices fall and I think that is the most detrimental act of panic because it will lose the assets you have if sold on cheap price.
I guess not all newbies traders are panic sellers, old investors out there will do the same thing when they believe the cryptocurrency market will crash. And not all panic sell leads to negative actions, each has its own way to get profit in each investment place and maybe sell panic is one of those ways.