Bitcoin Bulls Set Sights on $125,000 Amid US-Iran Peace Talks

As Asian markets opened on Friday, bitcoin was trading at around $74,700, marking a 0.4% decrease over the past 24 hours but still up 3.5% for the week. This comes as a 10-day rally in global equities has paused ahead of the impending US-Iran ceasefire expiry. Meanwhile, ether dropped 1.4% to $2,327 but remains the top performer among major cryptocurrencies, with a 6% weekly gain. Other notable movers include XRP, which held steady at $1.43 with a 6.4% weekly increase, solana, which rose 2.7% to $87.67, BNB, which added 0.7% to $629.89, and dogecoin, which climbed 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 Asian trading, while the S&P 500 also hit an all-time high. However, 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.' Despite the lack of confirmation from Iran, markets are reacting as if a deal is imminent, leading to a partial unwinding of the war premium in equities. Beneath the surface of the relatively flat bitcoin price action, some traders are taking note of the deeply negative perpetual funding rates, which have reached levels not seen since 2023. According to Daniel Reis-Faria, CEO of ZeroStack, such negative funding rates are a sign that the market is heavily short on bitcoin. If bitcoin continues to rise despite this, it could trigger a liquidation of short positions and accelerate the price movement. Reis-Faria predicts that bitcoin could reach $125,000 within the next 30 to 60 days if the short base is squeezed out. However, on-chain analyst CryptoVizArt offers a contrarian view, suggesting that bitcoin's 'True Market Mean' indicates the average active investor is currently underwater. Historically, prolonged periods below the True Market Mean have coincided with bitcoin's worst periods, including the 2018-19 bear market and the 2022-23 downturn. While these two perspectives may seem conflicting, it's possible that both a short squeeze and a structural drawdown from underwater holders could occur, with the former potentially triggering a rally that is later sold into by the latter. The dominant scenario will likely depend on whether the US-Iran ceasefire extension holds beyond next week.