Bitcoin Bulls Set Sights on $125,000 Amid Risk-On Sentiment and 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 global equity rally paused ahead of the impending US-Iran ceasefire deadline. Meanwhile, ether dropped 1.4% to $2,327, yet still led 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 uptick 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 achieved an all-time high. Brent crude fell 1.2% to $98.20 after President Donald Trump expressed optimism about the prospects for a permanent Iran ceasefire. Trump claimed, without providing evidence, that Tehran had agreed to abandon its nuclear ambitions, surrender nuclear materials, and reopen the Strait of Hormuz as part of the deal, although Iran has not confirmed these concessions. 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 these developments as if a deal is closer than it actually is, contributing to the unwinding of the war premium in equities while crude oil remains near $98 and the Strait of Hormuz remains effectively shut. However, some traders are focused on the underlying setup driving the flat bitcoin price action. 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 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 within the next 30 to 60 days if the short base gets squeezed out. In contrast, on-chain analyst CryptoVizArt notes that bitcoin's 'True Market Mean,' which estimates the average cost basis of active investors by filtering out lost and dormant coins, suggests that the average active holder is currently underwater. Since 2016, prolonged 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 the kind of outsized rally that ultimately gets sold into by the latter. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds beyond next week.