Having issues with Arduino + Bluetooth
Is the device on the other side of the bluetooth connection running at 9600 baud too ?

You say you transmit the state of the sensor - which BTW is only ever a space ' ', and never changes.  

So that value gets written out via the bluetooth connection.  

But then you read data in from the other party to the bluetooth communications.  

It sounds like you expect the data written to the bluetooth output serial line to also be echoed back from the bluetooth input.  The serial transmit and receive are separate channels.  You are receiving on the bluetooth.read() whatever the device connected to it is sending, not what you write yourself. 

What you are sending goes only to the other side of the conversation.  The remote device would need to echo whatever it sees back for it to work how you describe.