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

Bitcoin was trading at around $74,700 in Asian morning hours on Friday, down 0.4% over 24 hours but still up 3.5% for the week. This comes as a 10-day rally in global equities paused ahead of the upcoming US-Iran ceasefire expiry. Ether dropped 1.4% to $2,327 but continues to lead the majors on a weekly basis with a 6% gain. Other notable movements include XRP holding at $1.43 with a 6.4% weekly gain, solana rising 2.7% to $87.67, BNB adding 0.7% to $629.89, and dogecoin increasing 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. Meanwhile, 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.' Although Trump claimed Tehran had agreed to abandon its nuclear ambitions and reopen the Strait of Hormuz, 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. Markets are reacting to the headlines as if a deal is closer than it actually is, leading to equities unwinding most of the war premium while crude remains near $98 and the Strait of Hormuz remains shut. However, some traders are focusing on the underlying setup of the flat bitcoin price action. Bitcoin perpetual funding rates have turned 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 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 suggests that bitcoin's 'True Market Mean' indicates the average active holder is currently underwater. Since 2016, periods 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 reads 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. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.