Seeing the over hype of some new coins, many people, especially newcomers, are investing there without thinking. The dumping of those coins starts as soon as they invest, so they are facing losses. These over hyped new coins should be avoided at all times. Research on that project must be done before any investment.
You are correct, but most newbies just follow the hype and hope for the quick money. It's like people have to get burned before they actually start to learn a bit. The most valuable tip is always to only invest what one can afford to lose and to not put all eggs into the same basket.