I really don't think Diaz panicked at the sight of his own blood. He's been boxing for a long time, and I'm sure at some point whether it be in the amateurs, sparring, etc. he'd been cut before. The cut may have distracted, blinded, and bothered him, but he got beat and disheartened by the fact that Nate Campbell beat him at his own game and did not wilt like everyone else he stepped in the ring against.
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