There are many reasons that make them do that, basically they don't have a Trading Plan, they think that they will be finished if they don't sell immediately, lol. although Good News and Bad News that cause prices to fall are common, i believe most of the panic are newbies who have just entered the market.
Some people sell not just because others are selling when the market is showing a sign of weakness, but they sell because the price has touched their stop-loss level, which they will not want to incur more loss compared to what it might turn out to be if the price drops below that level, and some altcoins immediately start dropping that way they drop to some point that even in the next 1 year they might not be able to reach the ATH again or even the price the person purchased the coin at, so there is no harm in playing it safe.