"Steem is stagnating because people are trying to live off of it and keep selling it."
When somebody sells something, another somebody buys it. There has to be a buyer for there to be a seller.
So "people selling Steem" can't be the cause of the low prices we're seeing. Someone bought that Steem - it doesn't disappear.
The problem is related to supply and demand (which explain just about everything in economics IMO). Demand for STEEM is down, while supply remains strong. That's a classic recipe for sagging prices. Sadly, people just don't want STEEM right now, so it can be had for cheap.
Maybe they're foolish, and they should be buying it up cheap right now? That is yet to be seen. I hope that's the case.