Bitcoin Prices Eye $125,000 as US-Iran Peace Talks Fuel Risk Appetite

Bitcoin hovered around $74,700 during Friday's Asian morning session, posting 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 looming US-Iran ceasefire deadline. Meanwhile, ether slipped 1.4% to $2,327 but continued to lead major cryptocurrencies with a 6% weekly increase, extending its outperformance from earlier in the week. Other notable movers included XRP, which held steady at $1.43 with a 6.4% weekly gain, solana, which rose 2.7% to $87.67, BNB, which added 0.7% to $629.89, and dogecoin, which surged 5.6% on the week to $0.0976. The MSCI All Country World Index reached a record high on Thursday before dipping 0.1% in Asia, while the S&P 500 also hit an all-time high. However, brent crude fell 1.2% to $98.20 after President Donald Trump expressed optimism about a permanent Iran ceasefire, claiming Tehran had agreed to abandon its nuclear ambitions and reopen the Strait of Hormuz, 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. Despite the cautious market reaction, some traders are focusing on the underlying dynamics driving bitcoin prices. Bitcoin's perpetual funding rates have turned deeply negative, reaching levels not seen since 2023, indicating that the market is heavily short-biased. According to Daniel Reis-Faria, CEO of ZeroStack, such negative funding rates suggest that the market is primed for a potential short squeeze, which could accelerate bitcoin's price movement if it continues to rise. Reis-Faria predicts that bitcoin could reach $125,000 within the next 30 to 60 days if the short base is squeezed out. However, on-chain analyst CryptoVizArt offers a contrarian view, noting that bitcoin's 'True Market Mean' – a metric estimating the average cost basis of active investors – suggests that the average active holder is currently underwater. Historically, prolonged periods below the True Market Mean have coincided with bitcoin's most significant downturns, including the 2018-19 bear market and the 2022-23 unwind following the Luna and FTX collapses. While these two perspectives may seem conflicting, they can both be true, with a short squeeze potentially triggering an outsized rally that is eventually sold into by underwater holders. The dominant scenario will likely depend on whether the US-Iran ceasefire extension holds beyond next week.