Let's say I bought $1000 worth of Bitcoins before, thinking "it can go up, or it can go down, I can lose this money without an large impact on my day-to-day financials", why would I sell it now when it has gone down a bit?

It's not until you sell it, that you actually lose anything. Let it go down to $0, you shouldn't care, because you're only playing with money you know you could lose.

What do you stand to gain by others selling their cryptocurrencies by the way? Seems to be an odd position to hold.