Bitcoin Investors 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, experiencing a 0.4% drop over the past 24 hours but still maintaining a 3.5% weekly gain, as the 10-day rally in global equities paused ahead of the upcoming US-Iran ceasefire expiration. Ether saw a 1.4% decline to $2,327 but 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 gain, solana increasing by 2.7% to $87.67, BNB adding 0.7% to $629.89, and dogecoin rising 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. 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.' However, Tehran has not confirmed the concessions claimed by Trump, including giving up nuclear ambitions, turning over nuclear material, and reopening the Strait of Hormuz. 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. Nevertheless, some traders are focusing on the underlying setup, which could potentially trigger a significant price movement. 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. 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, meaningful stretches below the True Market Mean have aligned with bitcoin's worst periods, including the 2018-19 bear and the 2022-23 unwind after the Luna and FTX collapses. 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 ultimately gets sold into by the latter. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.