Look at what's happening right now; this coronavirus panic is causing people to go to a very safe (for the short-term) asset--cash. People are expecting this outbreak to cause quarantines and everything else that comes along with epidemics, so cash is useful for stocking up on food and supplies and consequently people are selling their investments. Plus once a huge drop happens in the stock market (or the crypto market), it causes even more selling due to the fear of losing even more money.
I sold zero coins because of the coronavirus panic, because I have enough fiat money to buy some supplies. The idea that people need to liquidate their coins in order to buy supplies assumes that people have zero fiat, which is really not the case, I don't think there's many people in the world who hold all their money in crypto. So, if someone needs cash, they can just withdraw if from the nearest ATM, no need to sell their coins.
I completely agree with you.
At the point in time everyone is liquidating their funds to survive. Most people don't care about investing and holding cryptocurrency at the moment, since the pandemic condition can not ascertained.