There is no reason in The Language Herself why you should not use where in this sentence.
There are to be sure people who will tell you that where can only refer to an actual spatial place, and cannot be extended to “figurative locations”, such as states and situations and events, for which you must use in which.
But the in of in which referring to a state or situation is already a “figurative” use of a locative preposition. And states and situations and events are themselves “figurative locations”: your “situation” is the “site” where you find yourself, your “state” is the “place” where something has “stood” you, and an “event” is something which has “arrived from” somewhere to the place where you stand in time.
Why on earth should you avoid using a figurative locative to refer to a figurative location?
The only grounds for avoiding this use is to satisfy an audience comprised mostly of people who hold the absurd opinion that the use is “wrong”. Alas, the composers of Standardized Tests are mostly people of that sort, who were taught this “rule” as small children and never acquired sufficient grasp of The Language to realize its absurdity. Consequently you should avoid the use when you are taking the test; but feel free to ignore it otherwise.