Does holding bitcoin strengthen the bitcoin network? If no, are those who sell and more their bitcoin on-chain generally doing bitcoin bad?
Holding Bitcoin helps to keep the good price of Bitcoin, it seems nothing to with "strengthen the bitcoin network".
Selling Bitcoin is a normal thing, why it is a bad? Before you buy the Bitcoin, you must already have a plan to sell it again someday, right? There is no way to gain profits if you hold it forever. So, there is no problem if you want to sell your Bitcoin at any time. However, you must analyze carefully about the right time of selling the Bitcoin, so you can get good profits.
I believe in holding bitcoin and I'm actually holding some quantity and still buying. But a greater part of me feels that there should be more to bitcoin that just buying and holding in private wallet to gain some profits. I believe that bitcoin will be much more beautiful if a good number of human populations are using bitcoin for their daily lives and have real testimony that bitcoin actually made their lives better.
The initial function of Bitcoin that Satoshi ever stated, it is for a digital currency. So people can do transaction with Bitcoin without the need of the third parties. Well, you must know that Bitcoin has been adopted as a payment tool in some countries. This means Bitcoin is actually not only for investment or trading purposes only. Bitcoin can be used for the payment tools for any goods or services. Unfortunately, it is still illegal to use it as a payment tool in some countries. People in these countries only have a chance to use it as an investment/trading tool.