Overview
Bitcoin surged for two consecutive days on September 21 and 22, with its price returning to the $86,000 level. According to CNBC, Bitcoin hit an intraday high of $86,349.90 that day, the highest level since late January, up more than 8% over the past week and about 34% over the past three months. Bitwise's chief investment officer said on a program that he believes this crypto winter has ended. Fortune's price record shows that on the morning of September 22, Eastern Time, Bitcoin was quoted at $86,039.36.
The price is back, but the questions have not become simpler. Bitcoin is still about 30% away from its all-time high of about $126,000 in October 2025, and $86,000 happens to be the ceiling repeatedly marked by on-chain data over the past month. To judge the cycle position, one needs to look at seven types of verifiable evidence together: drawdown depth, cost basis, valuation range, capital flows, stablecoin liquidity, holder behavior, and market rotation—rather than relying on a single moving average or one day's sentiment reading.
Key Points
The cycle is compressing, not disappearing. Bitcoin peaked on October 6, 2025, about eighteen months after the April 2024 halving, consistent with the previous two cycles, but this cycle's decline from the high to the low of about $58,000 in June 2026 was about 54%, far smaller than the previous bear market ranges of 77% to 87%.
The ceiling is drawn jointly by three independent datasets. The cost distribution of long-term holders, the futures liquidation chart, and the break-even point of spot ETFs all point the resistance range to $83,000 to $86,000.
Bottom signals have been used up, while top signals have not yet appeared. Glassnode's cycle indicator panel shows that the share of indicators in the coldest range fell to 2% after reaching 82% at the end of June, but three-quarters of the indicators are still below their respective historical medians.
New demand is still the gap. Realized market cap growth was interrupted in mid-September, the total stablecoin supply has not set a new high for five months, and the net buying scale of listed companies over the past three months is far below the same period last year.
The macro environment has not turned accommodative. The Federal Reserve raised rates by 25 basis points on September 16 to 3.75% to 4%, the CLARITY Act was blocked in the Senate, and Bitcoin completed this rebound in an environment of rising interest rates.
A Compressed Cycle
The decline depth is only half of the historical range
Bitcoin.com's complete review of the four-year cycle provides a key comparison. Bitcoin peaked at about $126,200 on October 6, 2025, about eighteen months after the April 2024 halving, while the peaks after the 2016 and 2020 halvings were about seventeen months and eighteen months later, respectively, so the timing rhythm has not been broken. What really changed is the magnitude: this cycle fell from the high to the low of about $58,000 in June 2026, a drawdown of about 54%, while the three bear markets of 2014, 2018, and 2022 wiped out about 87%, 84%, and 77%, respectively.
Speculative intensity also clearly converged. MVRV, which measures the ratio of market value to on-chain cost, peaked at 2.74 in 2025, while the peaks of the previous three cycles were 3.96, 4.72, and 5.88, respectively. The market did become expensive, but it did not approach past extremes. The same review also points out that this cycle saw two historical firsts: Bitcoin refreshed the previous cycle's high before the halving, and the year after the halving closed negative for the first time. Putting these together, a more accurate description is that the cycle is compressing, not that the cycle has ended.
What the rebound repaired, and what it left behind
From the June low to late September, Bitcoin recovered most of the decline, but the repair was uneven. August was the strongest month of the year, with spot ETFs seeing net inflows of $3.52 billion that month, narrowing the year-to-date cumulative net outflow from about $5.29 billion to about $1.77 billion. Sentiment indicators also returned from extreme fear in June to the greedy side in September. At the same time, the price tested the $83,000 to $86,000 range three times without success, until this rapid rally in late September brought it close again.
This is the core tension of the current cycle position: the evidence for the bottom area is already quite sufficient, the evidence for the top area has not yet formed, and the direction of the middle section depends on whether new funds are willing to take over the largest block of trapped supply in an environment of rising interest rates.
Seven Indicators for Tracking the Cycle Position
Drawdown depth and the halving clock
The most basic coordinates are the distance of the price from the all-time high and which part of the halving cycle is currently underway. Nasdaq's compiled halving schedule shows that the fourth halving in April 2024 reduced the block subsidy from 6.25 BTC to 3.125 BTC, and the next halving is expected in April 2028 at block height 1,050,000. Based on the historical rhythm of peaking after eighteen months and bottoming after twelve to fourteen months, the second half of 2026 should be between bottoming and re-accumulation.
When using this indicator, one should note its decay. More than 95% of all Bitcoin has been mined, annualized new supply is already below 1%, and the marginal selling pressure that halvings can remove shrinks with each cycle. The halving clock today is more like an expectation-coordination device than a strong causal factor at the supply-demand level.
The on-chain cost basis ladder
More informative than price is a set of cost lines. According to Glassnode's weekly on-chain report released on September 16, the average cost of active investors, i.e., the true market mean, is at $76,700, the short-term holder cost basis of buyers over the past five months is at $71,300, and the average cost of listed company treasuries is at $80,500. Further up, the previous week's report pointed out that the $83,000 to $86,000 range concentrates the purchase cost of about 1.07 million bitcoins, almost all belonging to long-term holders, with the densest tier near $85,000; the break-even point of U.S. spot ETFs based on cumulative subscription cost is about $86,000, and they have closed below that level for 228 consecutive trading days.
This ladder turns the abstract "bull and bear" into a testable positional relationship. When the price stands above the true market mean, it shows that active chips as a whole have returned to profit; reclaiming $86,000 means that the largest institutional buyers of the year have returned to unrealized gains for the first time, and the nature of the thickest layer of supply pressure overhead changes accordingly. The late-September rebound happened to push the price to this line, which is also why this rally is more noteworthy than previous tests.
MVRV and the cycle valuation range
MVRV and its standardized form, the Z-score, measure how far market value deviates from on-chain cost. CoinGlass's MVRV Z-score chart shows its classic use: values entering a high range usually correspond to cycle tops, while falling below the zero axis corresponds to major bottoms in history. Putting it together with the previous cycle peak of 2.74, the more realistic conclusion is that as the market scale expands, the historical thresholds themselves may need to be revised downward, and mechanically applying the extremes of 2017 or 2021 can easily miss the position for a long time.
Glassnode's cycle indicator panel provides another cross-section. The share of indicators in the coldest range reached 82% in the week of June 29 and remained above the long-term median for 41 consecutive weeks, the strongest bottom resonance of this cycle, while in the most recent complete week it had fallen to 2%. At the same time, three-quarters of the indicators are still below their respective historical medians, and for 43 consecutive weeks there has not been a situation where more than half of the indicators were above 50. Valuation has left the value zone, but it is not yet expensive.
ETF Flows and Realized Market Cap
Spot ETFs have turned the ebb and flow of traditional capital into daily readable data. Farside Investors' daily flow table shows that September's capital picture swung violently: on the 15th and 16th combined, net outflows totaled about $746 million; on the 17th and 18th, flows turned to net inflows of $159.5 million and $433 million; and on the 21st, a single-day net inflow of about $999 million was recorded, one of the strongest trading days in recent months. August's $3.52 billion net inflow was the year's best monthly performance.
The corresponding on-chain metric is realized market cap, the total value of all tokens calculated at the price of their last on-chain transfer. Glassnode data shows that realized market cap rose for 27 consecutive days before September 14, saw its first net outflow in 28 days on the 15th, and then weakened again. The logic of using the two together is straightforward: if price rises without a simultaneous expansion in realized market cap, it means the rally is being driven by turnover of existing holdings and leverage, not by new capital entering.
Stablecoin Supply, That "Ammunition"
Total stablecoin supply is a proxy for sidelined capital waiting off-exchange. In a mid-September report, Glassnode noted that total stablecoin market cap was about $301 billion, flat for a week, roughly 4% below the April 2026 peak, and had not set a new high for five months; its 30-day growth rate remained slightly below the historical range associated with Bitcoin's strongest next-month performance. DefiLlama's stablecoin dashboard allows this data to be tracked daily.
The value of this metric lies in the fact that it measures "whether new dollars are entering," not "what existing capital is doing." Stablecoin supply briefly contracted over the summer and has now stopped falling but is not expanding, meaning this rebound has mainly been completed by existing capital and short covering. If stablecoin supply re-enters an accelerating range and sets a new high, that would be the missing piece of the bull market narrative.
Long-Term Holder Behavior and the Sell-Side Risk Ratio
The most reliable type of evidence for judging whether the cycle is near a top comes from whether holders are distributing. The sell-side risk ratio standardizes the sum of realized profits and realized losses against realized market cap. Glassnode's calculations show that the seven-day average of this metric has fallen to 7 basis points per day, less than half of August's high of 16 basis points, while at the two prior highs in July and October 2025, the same metric rose to 35 and 23 basis points, respectively. Long-term holders' share of realized profits also fell from an August high of 88% to 47%.
The corporate treasury side is similarly quiet. Listed companies' net purchases over the past three months were about 5,900 BTC, whereas in July 2025 alone there were about 89,000 BTC. The change appeared in late September: according to Strategy's 8-K filing with the U.S. Securities and Exchange Commission, the company bought 950 BTC between September 14 and 20 for $75.7 million at an average price of $79,670, bringing its holdings to 846,000 coins at an average cost of $75,416. The Block's report noted that this was the company's first purchase in about three weeks and that its holdings now exceed 4% of Bitcoin's total supply of 21 million. The scale of 950 coins in a single week is still small compared with last year's pace, but the change in direction is worth recording.
Altcoin Rotation and Options Positioning
Cycle tops are usually accompanied by capital accelerating down the risk curve. Glassnode's calculations show that in three of four historical highs, altcoins' share of total "Bitcoin plus altcoin" market cap rose by at least 2.8 percentage points in the preceding 90 days; the current reading is negative 0.9 percentage points. Altcoins have risen about 21% in dollar terms over the past month, yet have not taken share from Bitcoin, which is inconsistent with the rotation characteristics of a mature top.
Derivatives positioning provides another cross-section. After the Senate vote failed on September 15, the one-week 25-delta skew turned from negative to positive, and the options market began paying a premium for downside protection; the max pain for the quarterly contract expiring September 25 was at $72,000, while the largest call wall above the current price was at $85,000, with a second at $90,000. The options market and the spot cost distribution gave almost the same answer for where upside resistance lies.
Macro Remains the Main Pricing Variable
Real Rates After the Rate Hike
In its policy implementation note on September 16, the Federal Reserve raised the target range for the federal funds rate to 3.75% to 4% and increased the interest rate on reserve balances to 3.90%. CNBC's report noted that this was the first rate hike since July 2023, and the updated dot plot showed that 16 of 18 participants expected at least one more hike this year. Core inflation fell over the same period, meaning that even if the policy rate stays put, real rates are automatically rising.
This explains why this rebound differs from previous cycle starting points. Historically, Bitcoin's major advances have mostly been accompanied by liquidity expansion, whereas this time the price repair has been completed against a backdrop of rising rates and long-end yields at cycle highs. Yahoo Finance's daily market roundup listed falling oil prices and a short squeeze as the direct triggers for the late-September surge; the persistence of such drivers is usually weaker than that of the liquidity cycle itself.
Policy Setback and Risk Appetite
According to CNBC, the U.S. Senate's procedural vote on September 15 failed to advance the CLARITY Act, dealing a setback to the crypto industry's push for market structure legislation. Notably, Bitcoin's reaction: prices fell only slightly that week and then strengthened the following week, while altcoins fell much more sharply. The policy setback did not break through Bitcoin's pricing center, but it clearly exposed the fragility at the lower end of the risk curve.
How to Use These Indicators
Define the Bull Market First, Then Judge the Position
The endless debate over "whether this is a bull market" is largely due to a lack of definition. An actionable definition requires at least three conditions to hold simultaneously: price holds above the upper end of the cost range for long-term holders and ETFs, realized market cap continues to expand, and total stablecoin supply sets a new high again. By this standard, what is currently met is half of the first condition; the other two are not yet in place. The benefit of writing the definition clearly is that it allows every subsequent market move to be tested rather than reinterpreted by emotion.
Investors can track Bitcoin's real-time price and trading changes on MEXC's market page, and then use the above on-chain and capital-flow indicators as background to judge whether price is absorbing supply or creating supply.
The $86,000 level is being repeatedly tested; open the BTC real-time market and watch it
The Risk of a Single Indicator Failing
Every indicator has scenarios in which it fails. The supply effect of the halving clock decays with each cycle; MVRV's historical thresholds shift downward as market size expands; ETF flows include basis arbitrage and market-maker hedging, and are not all directional buying; stablecoin supply is affected by regulation and issuer strategy; cost basis converges toward the current price during prolonged sideways trading, thereby losing its reference value. The truly useful method is to require multiple sources to corroborate one another and to reduce position certainty when indicators diverge, rather than picking the one that best fits an existing judgment.
Risks, Scenarios, and Follow-Up Observation Points
Three Scenarios
In the breakout scenario, price rises above $86,000 at a stable level of selling pressure and holds, long-term holders' trapped supply is absorbed, ETF buyers as a whole return to unrealized gains, and realized market cap resumes growth. This would be the cleanest confirmation that the cycle position is shifting from repair to expansion.
In the range scenario, price oscillates between the true market average price of $76,700 and $86,000, while both trading volume and capital flows cool. Historically, such phases can last for months, are extremely unfriendly to leveraged positions, and are relatively neutral for dollar-cost-averaging capital.
In the failure scenario, the price falls back below the true market average price and loses the $71,300 short-term holder cost basis, with the next dense on-chain buying zone located between $62,000 and $65,000. At this point, what needs to be reassessed is not the price itself, but the validity of the June low as the cycle bottom.
Time Points and Thresholds Worth Marking
The quarterly options expiry on September 25 will change the existing position structure, the Federal Open Market Committee meeting on October 27-28 determines the next step for real interest rates, the seller risk ratio returning above 16 basis points per day means the return of sellers on the scale of August, and the total stablecoin supply hitting a five-month high means new off-exchange capital entering. It should also be noted that institutional forecasts remain highly divergent; the 2026 forecasts compiled by CoinGecko show that mainstream institutions' target price ranges span several multiples, and have been revised downward multiple times during the year. Such forecasts are better used as a sentiment thermometer rather than a basis for positions.
James Mitchell's Exclusive View
In James Mitchell's view, the real information content of this market move is not that Bitcoin has risen back to $86,000, but that it hit the same line drawn by three independent methods. The long-term holder cost distribution, futures liquidation density, and spot ETF break-even point all fall simultaneously between $83,000 and $86,000. This coincidence itself shows that this range concentrates the largest block of real chips in this cycle. The price being rejected here is normal supply digestion; if it holds firm while the seller risk ratio remains low, that would be the most fundamental difference between this rebound and the one in August.
There are two places where the market may misread. One is equating sentiment indicators returning to the greedy side, or the price reclaiming a certain long-term moving average, with the start of a new bull market. By a stricter standard, a bull market requires evidence of new capital, and the fact that realized market cap growth was interrupted in mid-September and the total stablecoin supply has not hit a new high in five months precisely shows that this rally relies more on short covering and existing-holder turnover. The other misreading is directly interpreting this cycle's mere 54% drawdown as "the cycle is dead." A more cautious interpretation is that the cycle is compressing: the time rhythm is basically maintained, and the amplitude has significantly converged, which means future gains and losses may both be smaller than historical samples. Using the extremes of old cycles to set target prices and stop-loss levels will lead to errors at both ends.
What is most worth tracking next is whether three quantifiable conditions hold simultaneously: the price closes above $86,000 for consecutive sessions and the seller risk ratio does not return above 16 basis points, realized market cap resumes continuous growth, and stablecoin supply re-enters an expansion range. Any one condition alone is not enough to change the position structure; only when all three hold simultaneously does it constitute a shift in cycle position. The reverse conditions are equally clear: if the price loses $71,300 and is accompanied by continuous net outflows in realized market cap, then the validity of the June low needs to be reconsidered.
From a cross-asset perspective, the most notable structural change in this cycle is that Bitcoin's correlation with gold rose to a multi-year high this summer, while its linkage with stocks weakened. This is inconsistent with the traditional positioning of a "pure risk asset" and is closer to hedging demand against monetary credit. If this attribute is confirmed in the next liquidity cycle, Bitcoin's role in asset allocation, as well as its degree of dependence on the halving narrative, may both be repriced. Before that, a reasonable starting point for risk management is still to acknowledge that the price is still about 30% away from its historical high, and to set leverage and position limits accordingly.
Frequently Asked Questions
Is Bitcoin currently in a bull market?
By strict standards, it cannot yet be defined that way. Bitcoin is still about 30% below its historical high of October 2025, the price has just touched the $83,000 to $86,000 resistance zone where long-term holders and ETF costs are concentrated, while realized market cap growth was interrupted in mid-September and stablecoin supply has not hit a new high in five months. A more accurate description is that the cycle has shifted from deep drawdown to repair phase, and direction confirmation still requires evidence of new capital.
Which indicator is most useful for judging cycle position?
No single indicator can complete the judgment independently, but the on-chain cost basis ladder is the most practical. It translates the true market average price, short-term holder cost, long-term holder cost range, and institutional break-even point into specific price levels, turning "bull market" into a testable positional relationship. It should be used in conjunction with capital flow and holder behavior indicators to avoid being misled by converging cost lines during sideways markets.
Is the four-year cycle still valid?
The time rhythm is basically maintained, and the amplitude has clearly converged. The October 2025 top appeared about eighteen months after the halving, consistent with the previous two cycles; however, this cycle's maximum drawdown was about 54%, while historical bear markets were 77% to 87%. With more than 95% of Bitcoin already mined and annualized new supply below 1%, the halving's supply effect is diminishing with each cycle, and the cycle is more likely being compressed than ended.
Why is $83,000 to $86,000 important?
Because three independent datasets overlap in this range. The purchase cost of about 1.07 million Bitcoin is concentrated here, almost all belonging to long-term holders; the dense short liquidation band on the futures liquidation chart is located in the same range; the break-even point of U.S. spot ETFs calculated by cumulative subscription cost is about $86,000, and they have closed below it for 228 consecutive trading days. Reclaiming this range would change the profit-and-loss status of the largest batch of institutional holdings.
Can ETF fund flows be used as a leading indicator?
It is closer to a coincident indicator, and it needs to be scrutinized. Daily data fluctuates greatly; September 15 and 16 saw combined net outflows of about $746 million, while September 21 recorded net inflows of about $999 million. A more effective use is to look at weekly and monthly trends and cross-validate with on-chain realized market cap, because ETF flows include basis arbitrage and market-making hedges, and not all of it is directional buying.
Why is stablecoin supply regarded as off-exchange ammunition?
Stablecoins are the most direct dollar vehicle for entering the crypto market, and changes in their total amount approximate the increase or decrease of off-exchange standby funds. The current total stablecoin market cap is about $301 billion, about 4% below the April peak, and has not hit a new high in five months, indicating that this rally mainly relies on existing capital. If supply re-enters expansion and hits a new high, it usually means new purchasing power is entering.
What signals would indicate that a cycle top is forming?
Historical experience points to two types of evidence: rotation and distribution. Altcoins taking more than 2.8 percentage points of market cap share from Bitcoin within ninety days, with Bitcoin near its historical high, is a combination that has appeared at most past tops; a significant rise in the seller risk ratio and long-term holders' share of realized profits returning to a high level indicate that old chips are being concentrated for distribution. At present, neither type of signal is present.
Disclaimer
The above content is intended only to provide general market information and analysis, and does not constitute any investment advice, financial advice, legal advice, tax advice, or trading recommendation. The prices of crypto assets and other related financial assets may fluctuate significantly, and historical cycle patterns, technical indicators, and on-chain data cannot guarantee future results. The prices, fund flows, valuation indicators, and cost bases cited in the text will change over time, and the latest information published by relevant data platforms and institutions should prevail. Before making any decision, readers should conduct their own research and carefully judge in light of their own financial situation, investment objectives, and risk tolerance, and consult appropriately qualified professionals when necessary. The MEXC Crypto Pulse team assumes no responsibility for any direct or indirect losses arising from the use of the above information.
