Actually it's because of FOMO. When market goes up people think it will be up more so they buy. But after the market reverse, they realized that it was a mistake. Emotions work here and people panic after seeing the market go down and sell all their holding. Thats why pro traders always suggest to keep your emotions out of your mind when making a decision about trade.
That's true! THe fear of missing out leads people to make a wrong decision all the time. Mostly, when the market is bullish, people rush to buy without noticing that the market can reverse anytime. They fear that if they don't buy they will miss the chance to earn money. Therefore, they usually buy higher than they should. Emotions play an important role in decision making, to be professional traders you have to learn how to control your emotions!