How Do Moving Averages Act as Dynamic Resistance during a Dead Cat Bounce?

Moving averages (MAs) smooth out price data and represent the average price over a specific period. In a strong downtrend, longer-term MAs (like the 100-day or 200-day) slope downward and act as a ceiling.

When the price bounces up, it often hits one of these MAs and is rejected, as traders use the MA as a key selling point, thus confirming the dynamic resistance.