If you're talking about an individual trade, no a multi-month decline can't be due to one trade
Also, to close out a short position requires a purchase
A "panicked equity seller" wouldn't hit a low bid (sale) to close a short
You got the direction wrong, a panic to close a short would (or could) cause a "short squeeze" and result in an increase or temporary spike in share price
Again, if we step away from the microscope and gather our situational awareness, it is market forces that drive direction
Market forces include trading pressures and a company fundamentals but also to a very large degree include forces beyond an individual stock such as broader economic trends
The share price on any given day of an individual stock is a VERY small factor in the larger picture
It takes concentrating on the larger picture to trade successfully over the long term, IMO
There's my expert opinion, I hope it is helpful to you