What is the psychology behind the hammer candlestick?

The hammer candlestick reflects a specific price pattern in the financial market, characterized by a significant price drop followed by a strong rally. Its psychology lies in investors' reaction to market movements, indicating a potential price reversal after a period of decline. This pattern often signals a shift in market sentiment, where sellers initially drive prices down, but buyers later step in to push prices back up, reflecting a possible change in market trend.