Bitcoin Optimists Set Sights on $125,000 Amid US-Iran Peace Talks

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 expiration. Meanwhile, Ether dropped 1.4% to $2,327 but continued to lead major cryptocurrencies with a 6% weekly gain, extending its outperformance from earlier in the week. Other notable movements included XRP holding steady 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 gain at $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 achieved 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, Trump's claims that Tehran had agreed to abandon its nuclear ambitions, surrender nuclear material, and reopen the Strait of Hormuz were not confirmed by Iran. A separate 10-day ceasefire between Israel and Lebanon was announced, with Israeli Prime Minister Benjamin Netanyahu confirming the truce in a video message. Markets are reacting to the headlines as if a deal is imminent, contributing to the unwinding of the war premium in equities while crude oil remains near $98 and the Strait of Hormuz remains closed. Beneath the stagnant bitcoin price action, some traders are focused on the underlying setup. Bitcoin perpetual funding rates have turned deeply negative, reaching levels last seen in 2023. This indicates that shorts are paying longs, a scenario that only occurs when 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 be liquidated, and the move can accelerate quickly.' Reis-Faria predicts that bitcoin could reach $125,000 within 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 by filtering out lost and dormant coins, indicates that the average active holder is currently underwater. Historically, meaningful periods below the True Market Mean have coincided with bitcoin's worst periods, including the 2018-19 bear market and the 2022-23 downturn following 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 is eventually sold into by the latter. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds beyond next week.