Bitcoin Price Targets $125,000 as US-Iran Peace Talks Fuel Risk-On Sentiment

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 global equity 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 increase, solana rising 2.7% to $87.67, BNB adding 0.7% to $629.89, and dogecoin seeing a 5.6% weekly gain at $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.' Trump claimed, without evidence, that Tehran had agreed to abandon its nuclear ambitions and reopen the Strait of Hormuz as part of the deal, although Iran has not confirmed these concessions. A separate 10-day ceasefire between Israel and Lebanon was announced, with Israeli Prime Minister Benjamin Netanyahu confirming the truce in a video message. Markets are reacting to the headlines as if a deal is imminent, which has contributed to equities unwinding most of the war premium, while crude remains near $98 and the Strait of Hormuz remains effectively shut. However, some traders are focusing on the underlying setup, which is characterized by deeply negative bitcoin perpetual funding rates, a level last seen in 2023. According to Daniel Reis-Faria, CEO of ZeroStack, 'Funding rates this negative indicate that the market is heavily short. If bitcoin continues to move higher despite this, many of those positions could get liquidated, and the move can accelerate quickly.' Reis-Faria expects bitcoin to potentially reach $125,000 in the next 30 to 60 days if the short base gets squeezed out. In contrast, 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, including the 2018-19 bear market and the 2022-23 unwind after the Luna and FTX collapses. 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 ultimately gets sold into by the latter. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.