Bitcoin Price Eyes $125,000 as Market Sentiment Shifts Amid US-Iran Peace Talks

Bitcoin's price hovered around $74,700 on Friday morning in Asia, experiencing a minor 0.4% decline over 24 hours but still maintaining a 3.5% weekly gain, as the global equity market rally paused ahead of the upcoming US-Iran ceasefire deadline. Meanwhile, ether dropped 1.4% to $2,327, yet it continues to lead the major cryptocurrencies with a 6% weekly increase, extending its outperformance from earlier in the week. Other notable movements include XRP holding 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. However, brent crude fell 1.2% to $98.20 following President Donald Trump's statement that a permanent Iran ceasefire is 'looking very good,' despite lack of confirmation 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 these headlines as if a deal is imminent, contributing to the unwinding of the war premium in equities, although crude remains near $98 and the Strait of Hormuz remains closed. Beneath the stagnant bitcoin price, traders are focused on the underlying setup. Bitcoin's 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 predicts that bitcoin could reach $125,000 in the next 30 to 60 days if the short base gets squeezed out. In contrast, on-chain analyst CryptoVizArt suggests that bitcoin's 'True Market Mean,' which estimates the average cost basis of active investors, indicates that the average active holder is currently underwater. Historically, periods below the True Market Mean have aligned with bitcoin's worst periods, including the 2018-19 bear market and the 2022-23 unwind. These two perspectives do not have to be in 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.