Have you ever heard the quote "bad money drives out good.”? while this was first mentioned somewhere between 1519 and 1579, Bitcoin is just a living example of how that law is perfectly valid.
So the short explanation of Gresham's law according to Wikipedia is this:
Under Gresham's Law, "good money" is money that shows little difference between its nominal value (the face value of the coin) and its commodity value (the value of the metal of which it is made, often precious metals, nickel, or copper).
Simply put, people tend to spend the "bad money" first, imagine you have $30,000 in the bank, and 1 bitcoin in your wallet, you go to buy a new car, and the dealer accepts both fiat and bitcoin, you (or at least the majority of people) will rather spend the fiat first, this has led to a very low "fresh" supply of bitcoin which keep shirking with every cycle.
Fun facts, as of today;
13% of the supply has not moved for 10+ years
6.6% of the supply has not moved for 7 to 10 years
3.8% of the supply has not moved for 5 to 7 years
14.7% of the supply has not moved for3 to 5 years
6.6% of the supply has not moved for2 to 3 years
20.0 of the supply has not moved for 1 to 2 years
In plain English, 65% of the total supply has not changed hands for at least 1 year, we have never seen this much HODLing throughout bitcoin's history, despite the massive drop in its evaluation against the dollar, HODLers are HODLing stronger than ever.