It isn't really stupidiy, it is people who have probably invested more than they should have, who can't afford to lose everything, so they take measures to get their fiat back after a big dump on the markets.
They don't know, and we also can't be 100% sure, that the market will recover. It could have happened that bitcoin fell into a death spiral and those who sold first were the 'clever' ones.
But now in hindsight, we know that the price is back up $400 and that the sellers lost 20% for no reason.
I guess being around Bitcoin and other crypto for a few years makes you less sensitive to these crazy market moves, but I still am affected by the big swings, even if I don't sell because of them. Realising that your net worth has falled significantly in a few hours for no real reason can be tough! I understand why people then think that they should diversify, but they would usually be better off waiting a few days, then selling and diversifying.
Actually it is because of people who let themselves be conquered by their emotions since regarding the Cryptoworld you need to be rational in making decisions. People who didn't sold their bitcoins in the dump, including me, knows that it will recover base on the developments going on and its not time for the speculated "split" for people to panic so much and there's a possibility that it won't happen. Nonetheless, Bitcoin wouldn't just vanish in the snap of your fingers since it is properly decentralize throughout the globe and it depends on everyone whether to make the market grow or fall but based on what's happening I could say that almost if not everyone is choosing for the Bitcoin market to grow and bloom.