What about the theory of growth after a big fall?

For example, N number of people bought an asset at a price of 100$ , but before that, other people were buying it at much lower prices ($10-$90).

Let's say one of the early investors decides to completely or partially close their positions. The volume is so large that the asset's price drops by half.

Next are my thoughts on this.

Bought at 100$ - panic and the question of selling at a big loss or waiting for the price to at least return a little to previous levels.

Bought at 50$ - neutral, one can exit fearing a lower drop, or buy more.

Bought below 50$ - discounts, we buy.

This happened with the meme coin $GOVNO.

A powerful community bought back, while those who bought at the highs panicked and locked in losses. As a result, there was a very slow return to the already reached peaks due to the increase in positions that already had good profits.

I hope my thoughts will be understood ☺️, I would like to know the opinions of others on this matter, does it have any real basis or is it all a product of my sick imagination?

P.S. I would appreciate it if someone could recommend technical literature on similar topics.

Wishing everyone a good evening and profit)