Also, people hate to lose money. i.e. the difference between losing 1 dollar and breaking even is not large in fact, but is really large in mind. Even people who recognize this is irrational still suffer if feel they have lost money - so, removing this suffering is valuable to them.

If you only have 10 btc, selling one to break even lifetime will permanently mean you did not lose money. If btc go to a million each, an extra million will not make much difference, since utility of money at the top is much less than at the bottom.

Therefore I think it makes perfect sense for humans who bought btc cheaply to sell fractions of their total holdings to remove the possibility of losing money on btc overall.