I think yes. Panic selling can contribute to price down in the market. But its hard to convince other not to panic selling because they don't want to lose their money it always be their choice what to do.
If we list down all the factors which can result in the downfall in the market value of any of the crypto coin, then the most common and the most important reason behind that will be none other than that of the panic selling. Panic selling is the biggest mistake which is being made by the newbies and sometime by the experts as well because of loss of their control over their emotions which result in their loss as well as the downfall in the market value.