Bitcoin Bulls Set Sights on $125,000 as US-Iran Peace Talks Fuel Risk Appetite

Bitcoin was trading at around $74,700 during Asian morning hours on Friday, experiencing a 0.4% decline over 24 hours but still maintaining a 3.5% weekly gain, as the 10-day rally in global equities paused ahead of the US-Iran ceasefire expiry next week. Ether slipped 1.4% to $2,327 but continued to lead the majors with a 6% weekly gain, extending its outperformance from earlier in the week. Other notable movers included XRP, which held steady at $1.43 with a 6.4% weekly gain, solana rising 2.7% to $87.67, BNB adding 0.7% to $629.89, and dogecoin increasing 5.6% on the week to $0.0976. The MSCI All Country World Index reached a record high on Thursday before slipping 0.1% in Asia, while the S&P 500 also hit an all-time high. Brent crude fell 1.2% to $98.20 following President Donald Trump's statement that prospects for a permanent Iran ceasefire were 'looking very good.' However, Tehran has not confirmed the concessions claimed by Trump, including giving up nuclear ambitions and reopening the Strait of Hormuz. A separate 10-day ceasefire between Israel and Lebanon was announced, with Israeli Prime Minister Benjamin Netanyahu confirming the truce. Markets are reacting to the headlines as if a deal is closer than it actually is, contributing to the unwinding of the war premium in equities while crude remains near $98 and the Strait of Hormuz remains effectively shut. Meanwhile, some traders are focusing on the underlying setup behind the flat bitcoin price action. Bitcoin perpetual funding rates have turned deeply negative, reaching levels last seen in 2023, indicating that the market is heavily positioned against the price. According to Daniel Reis-Faria, CEO of ZeroStack, 'Funding rates this negative tell you the market is heavily short. If Bitcoin continues to move higher despite that, a lot of those positions could get liquidated, and the move can accelerate quickly.' Reis-Faria expects bitcoin could reach $125,000 in the next 30 to 60 days if the short base gets squeezed out. On-chain analyst CryptoVizArt offers a contrarian view, suggesting that bitcoin's 'True Market Mean,' which estimates the average cost basis of active investors, indicates the average active holder is currently underwater. Historically, meaningful stretches below the True Market Mean have aligned with bitcoin's worst periods. However, both scenarios can coexist, with a short squeeze triggering an outsized rally that ultimately gets sold into by underwater holders. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.