Italian believes game against Red Devils on Wednesday night starts off a defining period that will either make or break the club's campaign
The two sides lock horns in the first leg of the double-header at Stamford Bridge on Wednesday, with the reverse fixture taking place on April 12 at Old Trafford.
"The whole season rests on this moment. It will be very important," Ancelotti told the Daily Express.
"This period of the season always is, for every team. We have nine games this month. The good thing is that we are here in good form and good condition, physically and psychologically."
United are currently 11 points ahead of the Blues in the league, albeit having played a game more than Ancelotti's team.
But the former AC Milan boss believes that the game will not necessarily be decided on the ability of the players, as opposed to the physical condition and the approach that each team takes going into the match.
"What can decide these games? It could be the physical condition of the players, but also the courage that you have to use in these matches. You cannot be scared," Ancelotti said.
"It is very close between these teams in terms of ability, personality of the players, their character. There will be no surprises. Yes, my record against Ferguson is good, but that is history. Small details will decide this tie – and courage is one of them."