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.
And the most important thing is that it is not difficult to identify when FOMO is taking place, just look at what it is happening with ethereum right now, people are buying ethereum above 400 dollars and while there is a chance they are right and the price keeps going up those chances get lower each passing day, I really think we are close to the end of the positive movement for ethereum and when people finally realize this they are going to need to take a difficult decision as they will have to either face important losses or they will have to hold their coins until they can break even.