Bitcoin Bulls Set Sights on $125,000 Amid Risk-On Sentiment and US-Iran Peace Talks

Bitcoin was trading at approximately $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 global equities rally paused ahead of the upcoming US-Iran ceasefire deadline. Meanwhile, Ether dropped 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 movements included XRP holding at $1.43 with a 6.4% weekly gain, Solana increasing by 2.7% to $87.67, BNB adding 0.7% to $629.89, and Dogecoin rising 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 achieved an all-time high. However, Brent crude fell 1.2% to $98.20 following President Donald Trump's statement that a permanent Iran ceasefire was 'looking very good,' despite lacking evidence and unconfirmed concessions from Tehran. 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 imminent, contributing to the unwinding of the war premium in equities, while crude remains near $98 and the Strait of Hormuz remains effectively shut. Beneath the stable bitcoin price action, traders are focusing on the setup, particularly the deeply negative bitcoin perpetual funding rates, which have reached levels last seen in 2023. These negative funding rates indicate that the market is heavily positioned against the price, with shorts paying longs. According to Daniel Reis-Faria, CEO of ZeroStack, 'Funding rates this negative suggest the market is heavily short. If Bitcoin continues to rise despite this, many of those positions could get liquidated, and the move can accelerate quickly.' Reis-Faria predicts that bitcoin could reach $125,000 in the next 30 to 60 days if the short base gets squeezed out. Conversely, on-chain analyst CryptoVizArt notes that bitcoin's 'True Market Mean,' which estimates the average cost basis of active investors, suggests that the average active holder is currently underwater. Historically, meaningful stretches below the True Market Mean have aligned with bitcoin's worst periods. These two perspectives do not necessarily conflict, as a short squeeze from negative funding and a structural drawdown from underwater holders can both occur, with the former potentially triggering an outsized rally that is eventually sold into by the latter. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.