After Bitcoin's surge, is it a rebound or a reversal?

TL;DR

· BTC rose as high as $87,392, hitting a new high since late January;

· ETF and corporate balance sheet funds formed notable buying pressure in the same week for the first time this year;

· Bitfinex believes the current phase is closer to an early transition from a bear market to a new cycle, rather than a confirmed new bull market;

· The three signals truly worth watching are: whether the profitable supply ratio can remain sustainably above 75%, whether long-term holders re-enter a state of selling at a profit, and whether ETF and corporate funds can continue buying above the cost basis;

· The most important short-term support range is $85,000—$86,500. If capital flows remain positive, the next target will point to $90,000.

After Bitcoin reclaimed $87,000, the market began discussing a familiar question again: has a new bull market already begun?

On September 21, Bitcoin rose as high as $87,392, the highest level since January 29. Compared with the stage low of $57,803 on July 1, the rebound has already exceeded 50%. The price is currently trading mainly above the high-volume cost range of $85,000—$86,500.

But in Bitfinex's view, this rally cannot yet be simply defined as a "new bull market."

Looking at the past two cycles, bear market rebounds that ultimately did not evolve into new bull markets often also rebounded by about 50% from their lows. Therefore, the magnitude of the gain alone is not enough to distinguish the start of a bull market from a bear market repair. What truly matters is whether the capital structure and on-chain holding status are changing in sync.

Comparison chart of BTC's current rebound and past bear market rebounds

Not yet a bull market, but on-chain indicators have already begun to turn

The earliest improvement currently appearing is the "profitable supply ratio."

As of September 22, about 78.2% of Bitcoin's circulating supply was in profit, a clear recovery from 63% on September 17. In past cycles, the 75% level has often been an important dividing line: during bear market rebounds, this indicator may briefly enter above 70%, but then fall back again as profit-taking selling emerges; after truly entering a bull market, the profitable supply ratio can usually remain above 75% for a long time and gradually approach 90%.

Therefore, Bitcoin's first obvious pullback next is especially important.

If the proportion of profitable supply can still stabilize above 75% when prices fall, it means the new profit-taking positions created by this rally have not been cashed out on a large scale; if it falls below 75% again, it indicates that this market cycle may still mainly be a rebound that gets sold off.

Bitcoin Supply in Profit, Profit Supply Percentage Chart

Another important indicator, MVRV, is currently around 1.62, significantly higher than the 1.09 low in July, but still below the long-term average of about 1.8. Historically, after truly entering a bull market, MVRV typically breaks through the long-term average and continues to run above it. Based on the current realized price, this long-term average corresponds to approximately $95,000.

At the same time, the short-term holder MVRV is currently around 1.2, corresponding to an average cost of about $71,763 for short-term holders. Bitfinex refers to this level as the "warm region," meaning the market has clearly warmed up but has not yet entered a significantly overheated phase.

Historical experience shows that when this indicator rises to 1.3–1.4, recent buyers typically begin to show stronger profit-taking momentum. Based on the current cost structure, this roughly corresponds to a BTC price above $93,000.

In other words, the current on-chain state does not resemble a bull market top, but is closer to an intermediate stage where a trend is being established but not yet fully confirmed.

What is truly different this time is that ETFs and corporate capital have returned together

Compared with the breakout in early September, the biggest change this time comes from the capital side.

On September 21, U.S. spot Bitcoin ETFs recorded a single-day net inflow of $999 million, the largest single-day inflow since October 6, 2025; on September 22, they recorded another $714.7 million inflow.

Over the four trading days from September 17 to 22, ETFs absorbed a cumulative approximately $2.31 billion, equivalent to about 27,900 BTC. Based on the current new supply of about 450 BTC per day, this is equivalent to absorbing about 62 days of new output.

Bitcoin ETF Flow

Corporate balance sheet buying also restarted during the same period.

Strategy bought 950 BTC in the week ended September 20 at an average price of $79,670, its first increase in three weeks; Strive bought 1,355 BTC between September 14 and 18 at an average cost of $79,475.

These two companies alone bought 2,305 BTC in a single week. By comparison, all listed companies' Bitcoin treasuries absorbed a combined total of about 5,900 BTC over the previous three months.

More critically, as BTC continues to rise, ETF investors' aggregate break-even point has now returned to around $86,000, while corporate holders' cost basis is approximately $80,500. In other words, for the first time this year, both ETF investors and corporate holders have simultaneously returned to profitability.

This is also the most critical variable going forward.

If these funds only buy when prices fall below their own cost basis, they are merely "dip-buying capital"; only when ETFs and corporates continue net buying while already in profit — or even as prices continue to rise — can they truly transform into structural demand that drives trend expansion.

$85,000–$86,500 Becomes the New Key Cost Zone

Capital inflows are also directly reshaping the on-chain supply structure.

Previously, a large supply had accumulated around $80,500–$82,500, but with recent trading activity, coins in this zone have noticeably decreased. Meanwhile, a new high-volume cost range of approximately 633,000 BTC has formed between $85,000–$86,500, becoming the largest concentration band in the current on-chain cost distribution.

This means that marginal buyers in this rally, especially ETF and corporate capital, are establishing new cost bases above $85,000.

As a result, $85,000–$86,500 is transforming from a previous resistance zone into new structural support. As long as this level holds, the recent rally is more easily understood as the market beginning to accept higher prices, rather than a simple spike-and-retreat.

BTC Cost Basis Distribution Heatmap, $85,000–$86,500 supply concentration zone

At the same time, capital has already begun spreading to altcoins.

From September 18 to 22, all 35 major non-BTC trading pairs tracked by Bitfinex rose, with a median gain of 12%, significantly higher than BTC's approximately 6.6% gain over the same period. Among them, AVAX rose 38%, BCH rose 35%, SUI and HBAR both rose about 25%, while ETH and SOL rose 5.5% and 5.2% respectively. On September 22, Bitfinex's Altcoin Season Indicator also turned positive for the first time since January.

However, this is still not enough to confirm a true "altcoin season."

The real test is whether altcoins can hold up when BTC experiences its first significant pullback. If altcoins remain relatively resilient when BTC drops 3%–4%, it suggests there may be more genuine spot buying support in the market; if the average decline of altcoins widens back to more than 1.4 times that of BTC, it means the previous rally was still driven by strong leverage factors.

Chart of major altcoins' gains relative to BTC

What really matters next is whether institutions will keep buying

It is worth noting that BTC's recent breakout was not accompanied by a notable decline in interest rates.

Between September 18 and 22, the U.S. 2-year Treasury yield remained basically stable at 4.76%, while the 10-year yield only edged down slightly from 5.01% to 4.96%. During the same period, BTC rose 6.6%, outperforming the Nasdaq 100, the S&P 500, and gold.

This means the recent rally is more likely to have come from capital inflows within the crypto market itself, rather than a sudden improvement in the macroeconomic rate environment.

Conversely, a renewed rise in interest rates still poses a potential risk. Bitfinex believes that if the U.S. 2-year yield rises back above 4.8%, or if the market begins to significantly increase expectations of another rate hike in October, macroeconomic factors could once again outweigh the impact of ETF and corporate capital flows.

Based on current data, Bitcoin has clearly moved away from its July slump, but it is still some distance from "confirmation of a new bull market."

Bitfinex defines the current market as an early transitional phase: some indicators have already shown early bull market characteristics, but long-term capital and on-chain indicators have not yet all completed confirmation.

In the short term, $85,000–$86,500 is the most important price range.

If ETFs continue to see net inflows, perpetual contract funding rates remain neutral, and the price holds above this cost zone, BTC may next continue to test $90,000.

If it falls below this range, the area around $80,500 will become the next layer of support; and if the price continues to fall below $81,300 while ETFs see renewed outflows and altcoins post even larger catch-up declines, it would mean the market structure of this upward breakout is beginning to break down.

Therefore, what is more worth asking now is not "whether the bull market has arrived," but: after BTC has once again climbed above the cost line of institutional capital, are these funds still willing to keep buying? If the answer is yes, this rally may truly evolve from a bear market recovery into a new trend cycle.

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