This demonstration shows Gyroscopic precession, which is a phenomenon that arises when a torque is applied to a spinning wheel (in an axis other than the one the wheel is spinning around). Because not all parts of the wheel are equidistant to the axis of the torque, the coriolis effect causes a torque in the 3rd axis, inducing a rotation. This rotation then induces a counter-torque in the original axis, keeping the wheel horizontal. This also explains why the wheel drops down once the precession is stopped.