Bitcoin has staged a slight recovery after hitting a monthly low, but is still struggling to break above the key resistance level at $85,000. On Saturday, Bitcoin hit $84,525, up 10% from its monthly low. However, compared to its yearly peak, Bitcoin is still in a downtrend, down more than 22%.

Potential Risks to Bitcoin Price
The current Bitcoin recovery faces two main risks.

First, market sentiment has not yet fully recovered. Although Bitcoin's Fear and Greed Index has exited the extreme fear zone (18 points), it is still at 22, indicating that the market is still in a state of anxiety. This is also reflected in outflows from Bitcoin spot ETFs, with a recent $143 million loss bringing the total outflows over the past five weeks to $870 million.

Second, Bitcoin has formed a “death cross” pattern, a technically negative signal that occurs when the 50-day weighted moving average crosses below the 200-day moving average. History shows that this pattern usually signals a prolonged downtrend. In this case, Bitcoin could retest key support at $73,900 – the March 2024 high.

Opportunities Supporting Bitcoin Price
Aside from risks, Bitcoin also has two factors that could fuel a recovery.

First, the US Federal Reserve (Fed) meeting on March 18-19 will be an important event. If the Fed adopts a more dovish stance on monetary policy due to recession fears, the possibility of a rate cut could increase. This would create positive momentum for Bitcoin and other risk assets.

Second, the market could see a wave of buying if investors are willing to take risks. The fact that the stock and cryptocurrency markets have been under great pressure in recent times could cause investors to look for opportunities when prices fall. This is what happened during the COVID-19 pandemic, when investors panic sold in March 2020, but then returned to buying when the Fed had supportive policies.

Conclusion
Bitcoin is in a critical phase when it faces both risks and opportunities. Technical trends show that the risk of a price decline still exists, but if the Fed makes a positive move or investor sentiment improves, Bitcoin could recover strongly. Investors need to closely monitor market developments to make reasonable decisions.