As Bitcoin (BTC) retests a critical support level, analysts have warned that the leading cryptocurrency is facing its strongest week in months, which could make or break its 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, falling to the $75,666 level before rebounding. The flagship crypto is trading between $74,000 and $80,000 after breaking out of its three-month range earlier this month.
Amid its recent performance, analyst Sjuul of AltCryptoGems claimed that BTC is at a decisive moment that could decide its fate, as 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 zone sits at the top of the ascending channel or bear market formation that is developing on the BTC chart. This is also a key horizontal level that has served as a major support zone since the fourth quarter 2024 rally.
Additionally, there is a pattern around this level that resembles the price action in January. At the time, Bitcoin was trading in a bear flag pattern and facing strong resistance around the $97,000 horizontal level. After failing to reclaim this area, the flagship crypto fell to the low of $60,000.
According to the analysis, an initial rejection from this level is normal, but investors should monitor BTC’s reaction below this level. “As you can see, the local structure remains bullish, so it will be important for buyers to maintain momentum here in order to attempt a breakout again,” Sjuul detailed.
Therefore, the “line in the sand” will be around the $74,000 support as structure and former resistance converge there. “If the bulls manage to maintain this level, we have a really good chance of breaking above $80,000 and potentially flying towards the next resistance level at $86,000,” he added.
FOMC meeting to determine the fate of BTC?
Sjuul warned that this week is likely “one of the most important weeks for BTC in months,” citing Wednesday’s FOMC meeting as the biggest market catalyst that could push prices in either direction.
He noted that this would also be the last meeting of Federal Reserve (Fed) Chairman 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 out that the appointment of a new Fed chair has always put pressure on the markets, with Bitcoin falling more than 50% each time. In January 2014, BTC collapsed by 84% in the following months after Janet Yellen took office.
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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 highlighted the importance of the $74,000 support this week, noting that if that level was lost, “things could get pretty ugly because we would form a really bad gap” from the previous range, which could open the door to a retest of the February lows.
Featured image from Unsplash.com, chart from TradingView.com
