Lets say there are these buy orders:
100 coins at 0.0019
100 coins at 0.0018
100 coins at 0.0017
100 coins at 0.0016
100 coins at 0.0015
100 coins at 0.0014
100 coins at 0.0013
100 coins at 0.0012
100 coins at 0.0011
100 coins at 0.0010

Then lets say someone just wants to sell 1000 coins for whatever reason. What will happen is that he will eat all those 10 buy orders and the price on that exchange will all of a sudden be displayed as 0.0010 as if the value just dropped 50%. But there probably were people who would've been happy to buy at lets say 0.0017 but they saw that there already were higher bids and just decided to wait and see. If everyone who wanted to buy placed their bids at the price they are ready to buy at, this wouldn't happen. We would have massive amount of buy orders and someone dumping coins couldn't make a dent on that list at all.

What usually happens though, is people see that omg price is down 50% it's gonna drop to zero and panic and go ima sell asap at the lowest price possible. Then there are other people who see what happened and see it as a buying opportunity. One of the groups is right and the other is not. Everyone should evaluate which is which and act accordingly.

That's my understanding but ymmv.