Bitcoin Bulls Eye $125,000 as US-Iran Peace Talks Fuel Market Optimism

Bitcoin was trading at around $74,700 in Asian morning hours on Friday, experiencing a minor 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 but continued to lead the majors with a 6% weekly gain, extending its outperformance from earlier in the week. XRP held steady at $1.43 with a 6.4% weekly increase, while Solana rose 2.7% to $87.67, BNB added 0.7% to $629.89, and Dogecoin saw a 5.6% weekly gain to $0.0976. The MSCI All Country World Index reached a record high on Thursday before slipping 0.1% in Asia, and 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 of Tehran's concessions. 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 imminent, which has led to equities shedding most of their war premium, while crude remains near $98 and the Strait of Hormuz remains effectively shut. Nevertheless, some traders are focused on the underlying setup, which shows bitcoin perpetual funding rates turning deeply negative, reaching levels last seen in 2023. This indicates that the market is heavily positioned against the price, with shorts 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. On the other hand, on-chain analyst CryptoVizArt suggests 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. 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 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.