As Bitcoin (BTC) retests a critical support level, analysts have warned that the leading cryptocurrency is headed for its biggest week in months that could make or break its recovery rally.
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Bitcoin price at a crossroads
On Tuesday, Bitcoin fell below the $76,000 support for the first time in a week, then fell to the $75,666 level before rising again. The flagship crypto traded between $74,000 and $80,000 after breaking out of its three-month range earlier this month.
Amid its recent performance, AltCryptoGems analyst Sjuul said confirmed that BTC is at a ‘make-or-break’ moment that could determine its fate as both the technical and fundamental aspects are ‘at a crossroads’.
From a technical perspective, he explained that the cryptocurrency is currently facing “the most relevant resistance on the chart.” Notably, the $80,000 area is at the top of the rising channel or bear market formation developing on BTC’s chart. It also marks a key horizontal level that has served as a key support zone since the rally in the fourth quarter of 2024.
Furthermore, around this level there is a setup similar to January price action. At the time, Bitcoin was trading within a bear flag pattern and faced strong resistance around the horizontal level of $97,000. After the flagship crypto failed to regain this territory, it fell to a low of $60,000.
According to the analysis, an initial rejection from this level is normal, but investors should keep an eye on BTC’s reaction below. “As you can see, the local structure remains bullish, so it will be important for buyers to maintain the momentum here to attempt another breakout,” Sjuul said.
Therefore, the “line in the sand” will be around the $74,000 support as the structure and past resistance converge there. “If the bulls manage to hold that level, we really have a good chance to break above $80,000 and possibly fly to the next resistance level at $86,000,” he added.
FOMC Meeting to Determine BTC’s Fate?
Sjuul warned that this week is likely “one of the biggest weeks for BTC in months,” citing Wednesday’s FOMC meeting as the biggest catalyst for the market that could push prices in either direction.
He emphasized that it will also be the last meeting of Federal Reserve (Fed) Chairman Jerome Powell. “Wednesday is not just a rate decision; it is Powell’s final press conference. Every word will carry extra weight.”
Analyst Ted Pillows be that the appointment of a new Fed chairman has historically put pressure on the markets, with Bitcoin falling more than 50% each time. In January 2014, BTC crashed 84% in the following months after Janet Yellen took over.
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Similarly, the flagship crypto fell 73% and 61% in February 2018 and May 2022, when Powell was confirmed for his first and second terms. If history repeats itself, Bitcoin could see a major correction next month when Kevin Warsh is expected to become the next Fed chairman.
Ultimately, Sjuul emphasized the importance of the $74,000 support during this week, noting that if this level is lost, “things could get quite ugly as we would form a very nasty divergence” from the previous range, which could open the door for a retest of the February lows.
Featured image from Unsplash.com, chart from TradingView.com