What people fails to understand is that life itself is full of risk people don't want to risk the hard way and the lifestyle of a crypto preacher is full of making hard decisions in other to become wealthy taking risks is major life in the crypto space.
I think all of this panic and fears usually occur in most beginners of trading, mostly when they feel their money isn't giving them results,and sometimes they may be scared of the returns instead of giving it time and patience they nurture some fear and doubt as well because they are scared of loosing the whole money, but they forget to understand that trading involves risks and you must undergo it to know what it takes to hold up assets for a long period of time.
definitely fear of loosing their entire investment is the one thing that causes most of panic selling.
when inexperienced newbie is doing trading, they always feared that the market could suddenly turn their investment to zero instantly, which is irrational, but you see whenever there's massive selling or a flash dump, the newbie will become fearful and also dump their coin further intensifying the panic sell and as a result they realized their loss or negative pnl, meanwhile smart trader know that if market already dumped so deep anyway, selling would just mean we are losing, can always wait for a recovery and minimize loss or even turn loss into profit.