Bitcoin Prices May Surge to $125,000 Amidst US-Iran Peace Talks

Bitcoin was trading at around $74,700 in the Asian morning session on Friday, down 0.4% over the past 24 hours but still up 3.5% for the week, as the 10-day rally in global equities paused ahead of the US-Iran ceasefire deadline next week. Meanwhile, Ether dropped 1.4% to $2,327 but remains the top performer among major cryptocurrencies with a 6% weekly gain, extending its outperformance from earlier in the week. Other notable gainers 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 saw 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. However, Brent crude fell 1.2% to $98.20 after President Donald Trump stated that prospects for a permanent Iran ceasefire were 'looking very good.' Despite the lack of confirmation from Iran, markets are reacting to the headlines as if a deal is imminent, which has led to equities unwinding most of the war premium while crude remains near $98 and the Strait of Hormuz remains effectively shut. Beneath the stagnant bitcoin price action, some traders are focusing on the setup, which includes 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 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, prolonged periods below the True Market Mean have coincided 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 have to be mutually exclusive, 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.