Bitcoin Bulls Eye $125,000 as Market Sentiment Shifts Amid US-Iran Peace Talks

Bitcoin was trading at approximately $74,700 during Asian morning hours on Friday, experiencing a 0.4% decline 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 expiration of the US-Iran ceasefire next week. 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. Other major cryptocurrencies, including XRP, solana, BNB, and dogecoin, also saw gains. The MSCI All Country World Index reached a record high on Thursday before slipping 0.1% in Asia, while the S&P 500 hit an all-time high. However, Brent crude fell 1.2% to $98.20 after President Donald Trump stated that prospects for a permanent Iran ceasefire were 'looking very good.' Despite the positive sentiment, some traders are focusing on the underlying setup in the bitcoin market, particularly the deeply negative perpetual funding rates, which have reached levels last seen in 2023. According to Daniel Reis-Faria, CEO of ZeroStack, these negative funding rates indicate that the market is heavily short-biased, which could lead to a forced unwind and a rapid price acceleration if bitcoin continues to move higher. Reis-Faria predicts that bitcoin could reach $125,000 in the next 30 to 60 days if the short base gets squeezed out. However, on-chain analyst CryptoVizArt notes that bitcoin's 'True Market Mean' suggests the average active holder is currently underwater, which has historically aligned with bitcoin's worst periods. The two perspectives do not necessarily conflict, as a short squeeze and a structural drawdown can both occur, with the former potentially triggering a rally that is later sold into by the latter.