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

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 rally in global equities paused ahead of the impending US-Iran ceasefire deadline. Meanwhile, Ether dropped 1.4% to $2,327 yet 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 increase 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. 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 regarding the concessions claimed by Trump, 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. However, beneath the flat bitcoin price action, some traders are focusing on the setup that could potentially trigger a significant move. Bitcoin 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 signify that 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. On the other hand, 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, periods where the price has been 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 be true, 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.