Bitcoin Bulls Set Sights on $125,000 as US-Iran Peace Talks Fuel Market Optimism

Bitcoin was trading at around $74,700 during Asian morning hours on Friday, marking a 0.4% decline over 24 hours but still a 3.5% gain for the week, as the 10-day global equity rally paused ahead of the impending US-Iran ceasefire deadline. Meanwhile, Ether slid 1.4% to $2,327 but continued to lead the majors with a 6% weekly gain, extending its outperformance from earlier in the week. Other notable movers included XRP, which held steady at $1.43 with a 6.4% weekly gain, 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 dipping 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 was 'looking very good', despite lacking evidence and unconfirmed concessions 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 the headlines as if a deal is closer than it actually is, resulting in equities unwinding most of the war premium while crude remains near $98 and the Strait of Hormuz remains effectively shut. Underneath the stagnant bitcoin price action, some traders are focusing on the setup. Bitcoin's perpetual funding rates have turned deeply negative, reaching levels last seen in 2023, indicating that shorts are paying longs. According to Daniel Reis-Faria, CEO of ZeroStack, 'Funding rates this negative signal 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. However, on-chain analyst CryptoVizArt offers a contrarian view, suggesting 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, meaningful stretches below the True Market Mean have aligned with bitcoin's worst periods. While these two perspectives may seem conflicting, 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.