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

Bitcoin hovered around $74,700 during Asian morning hours on Friday, experiencing a minor 0.4% drop over 24 hours but still maintaining a 3.5% weekly gain, as the global equity rally paused ahead of the impending US-Iran ceasefire deadline. Meanwhile, Ether slipped 1.4% to $2,327, yet still leads the majors with a 6% weekly gain, extending its outperformance from earlier in the week. Other notable movements included XRP holding steady 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 surge to $0.0976. The MSCI All Country World Index reached a record high on Thursday before dipping 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 a permanent Iran ceasefire was 'looking very good,' although Tehran has not confirmed any concessions. 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. However, some traders are focusing on the underlying setup, particularly the deeply negative bitcoin perpetual funding rates, which have reached levels last seen in 2023. According to Daniel Reis-Faria, CEO of ZeroStack, such negative funding rates indicate a heavily short-biased market. If bitcoin continues to rise despite this, it could lead to the liquidation of many short positions, accelerating 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. On the other hand, on-chain analyst CryptoVizArt notes that bitcoin's 'True Market Mean' suggests the average active holder is currently underwater, which has historically aligned with bitcoin's worst periods. While these two perspectives may seem conflicting, they can both be true, with a short squeeze potentially triggering a significant rally that is eventually sold into by underwater holders. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.