BTC breaks 126,000 to release a long signal, Glassnode and Bitwise explain in detail the key to recovery

According to Woofun AI, the Bitcoin price broke through the $70,000 mark, and Glassnode's Bitcoin vector indicator then switched to a “risk appetite type” state. This technical signal is seen as an early anchor point for a recovery in market sentiment. This shift in the indicator is not an isolated event, but is closely coupled with the recent upward shift in price gravity, marking the first major trend reversal since Bitcoin began falling around $126,000 on October 12, 2025, and the indicator moved to a “risk aversion type.”

Although the model does not claim to accurately capture the top of the market, its ability to recognize trend changes provides a quantitative basis for rebuilding the current confidence of the bulls. It is worth noting that this change in the indicator status occurred after Bitcoin regained the critical psychological threshold of $70,000. This price level was decisive in reshaping the short-term holders' cost benchmark, directly reducing the selling motivation caused by panic closing positions. Although pressure to settle profits still exists, the market structure has substantially improved.

According to data compiled by Woofun AI, Glassnode's vector index combines momentum thresholds and capital flow indicators. There is a certain delay in releasing the latest values, and the core calculation formula is confidential, making it impossible for the outside world to independently reproduce and verify. This requires investors to cross-confirm it in combination with a wider range of market data. Looking back at history, the last indicator showed a “risk appetite” status on August 21. At that time, Bitcoin had just broken through $70,000, making recent buyers' holding costs higher than the average purchase price, thus curbing the motivation to sell simply to reach a liquidation point.

However, this does not mean that the demand-side problem has been completely solved; the market still needs new buyers to accept sell-offs from lower holders. Meanwhile, the 'Market Compass' indicator published by Glassnode currently has a value of 14 points (out of 100) and is still in a 'risk aversion type'. The indicator comprehensively considers seven factors, including the performance of various industries, Bitcoin's relationship with the macro market, short-term holder cost benchmarks, and global liquidity conditions. Unlike vector metrics that only assess the state of the Bitcoin market, a 'market compass' measures whether the broader cryptocurrency industry and macro environment are favorable. Together, the two indicate that Bitcoin's recovery is improving, but the entire market has yet to completely leave the risk zone. This differentiation suggests that investors need to be wary of the macro-environment's restrictions on the trend of a single asset.

From an institutional perspective, Bitwise Europe expressed optimism in the September Bitcoin Report. Research leader André Dragosch pointed out that as long as Bitcoin can maintain its recovered price level, the new bull market is expected to continue. The agency identified three key support levels: a short-term holder cost benchmark around $70,200, a 'real market average' around $76,200, and a 200-day moving average around $69,100.

Meanwhile, $83,000 is seen as the last major hurdle, and breaking through this mark will prove that the pattern of the rebound from the lows has been reversed. Capital flow data supports this view: Farside Investors data shows that during the 10 trading days from August 20 to September 2, the cumulative net inflow of US Bitcoin spot ETFs was $1.92 billion, of which 8 trading days were positive. The net inflow in a single day exceeded 600 million US dollars on August 20. Although there were capital outflows of US$201.9 million and US$236.5 million on August 28 and September 1, respectively, this continuous positive net inflow pattern is more significant than the single-day increase, indicating that new capital is entering the market.

However, these buyers are currently insufficient to withstand every price retracement, and the market still needs to see if the net inflow of capital remains positive as it approaches the $83,000 resistance level to confirm that the recovery is driven by real buying power rather than short closing positions.

To consolidate the current recovery trend and start a new sustainable upward trend, the market must meet three conditions: first, the Bitcoin price must remain above the “real market average” of $76,200 to establish the effectiveness of bottom support; second, ETF capital inflows need to remain positive over multiple trading days to prove the sustainability of institutional demand; and finally, Bitcoin needs to break through the resistance level of $83,000 without excessive increase in leveraged positions to avoid repeating the mistakes of previous drastic fluctuations caused by excessive leverage. Even if these conditions are not fully met, the shift in vector indicators from “risk aversion type” to “risk appetite type” still reflects a significant improvement in the market compared to the previous one. But that doesn't answer the core question: Can the current recovery evolve into a long-term bull market? The answer depends on whether the demand side can provide sufficient bearing capacity before critical resistance levels, and whether the macro environment allows risky assets to continue to expand. If capital inflows slow down or leverage is rapidly piled up, the market may once again fluctuate; conversely, it is expected to confirm the starting point of a new upward trend.