As Bitcoin (BTC) retests a critical support level, analysts have warned that the leading cryptocurrency is facing its most important week in months, which could make or break its recovery.
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Bitcoin price at the crossroads
On Tuesday, Bitcoin fell below the $76,000 support for the first time in a week, falling to the $75,666 level before bouncing back. The major cryptocurrency was trading between $74,000 and $80,000 after breaking through its three-month range earlier this month.
Amid recent performance, AltCryptoGems analyst Sjuul confirmed that BTC is at a crucial moment that could decide its fate, as both technical and fundamental are “at a crossroads”.
From a technical perspective, he explained that the cryptocurrency is currently facing “the most relevant resistance on the chart.” Namely, the $80,000 area is at the top of a rising channel or bear market formation that is developing on the BTC chart. It also marks a key horizontal level that has served as a major support zone since the rise in the fourth quarter of 2024.
Additionally, there is a setup around this level that resembles the January price action. At the time, Bitcoin was trading within a bearish pattern and faced strong resistance around the $97,000 horizontal level. After failing to regain this area, the major cryptocurrency fell to a low of $60,000.
According to the analysis, an initial bounce from this level is normal, but investors should monitor BTC’s reaction below it. “As you can see, the local structure remains bullish, so it will be important for buyers to maintain momentum here to try to break through again,” Sjuul detailed.
Therefore, the “line in the sand” will be around the $74,000 support, as the structure and former resistance converge there. “If the bulls manage to hold that level, we really have a good chance of breaking above $80k and potentially flying to the next resistance level at $86k,” he added.
FOMC meeting to determine fate of BTC?
Sjuul warned that this week is likely to be “one of the most important 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 the President of the Federal Reserve (Fed) Jerome Powell. “Wednesday isn’t just a rate decision; it’s Powell’s last press conference. Every word will carry extra weight.”
Analyst Ted Pillows pointed he points out that the appointment of a new Fed chairman has historically put pressure on the markets, with Bitcoin falling by more than 50% each time. In January 2014, BTC fell 84% in the following months after Janet Yellen took office.
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Similarly, the leading cryptocurrency fell 73% and 61% in February 2018 and May 2022, respectively, 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.
Finally, Sjuul stressed the importance of $74,000 support through this week, noting that if this level is lost, “things could get pretty ugly as we would form a very nasty divergence” in the previous range, which could open the door to a retest of the February lows.
Featured image from Unsplash.com, chart from TradingView.com
