Imagine this:
in a market there are 10 sellers and 5 buyers.
the 10 sellers have to compete with each other to sell their btc.
because each btc is the same and the buyers dont care about who they get their btc from, the sellers have to lower their price to be competitive and attract buyers.
Buyers buy from the seller offering the lowest price because we assume that they are rational.
the price of the last transaction is what the market prices is. more sellers=more competition=lower prices.

now lets say that prices have dropped significantly.
5 of the 10 sellers think that the price is lower than what they think BTC is worth and want to buy BTC.
there are now 10 buyers and 5 sellers.
the buyers are now competing with each other to offer the most attractive price to the sellers, which is a higher price.
this now drives the prices up.

of course its a little more complicated than that but its the basics of how it goes. hope this helps.