Oh,
@Saaniya I'm so sad for this chick. I'm sad for you.
I think the sweater you used for bedding may have caused the problem. The fine fibers on a knit sweater are loose, and baby chicks naturlly peck at their bedding instinctively searching for grit and food. Find fibers can clog the trachea and even get into the lungs.
This is something almost no one will think of when caring for a baby chick until something happens like this. I don't think there was anything you could do to save this chick.
This chick may have had another problem, and the bedding had nothing to do with it, but to be safe, you need to remove the sweater and find a better bedding.