Panic selling can be both a good and a bad thing, i know some people that hodl their BTC when it started to dump from 19k+ in early 2018 and they only had regrets in the end because Bitcoin did not recover that price again for almost 3 Years.
So in a generally bearish market condition, it helps to minimize your exposure to loss, sell some portion of your portfolio yo avoid making a bigger loss if the market doesn't recover