Bitcoin Bulls Set Sights on $125,000 as US-Iran Peace Talks Fuel Market Optimism

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 but continued to lead 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 increase 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. Brent crude fell 1.2% to $98.20 following President Donald Trump's statement that a permanent Iran ceasefire was 'looking very good,' although Tehran has not confirmed the 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, contributing to the unwinding of the war premium in equities while crude remains near $98 and the Strait of Hormuz remains effectively shut. However, some traders are focused on the underlying setup, particularly the deeply negative bitcoin perpetual funding rates, which have reached levels last seen in 2023. According to Daniel Reis-Faria, CEO of ZeroStack, 'Funding rates this negative indicate a heavily short-biased market. If bitcoin continues to rise despite this, many of those positions could be liquidated, leading to a rapid acceleration of the move.' Reis-Faria predicts that bitcoin could reach $125,000 within the next 30 to 60 days if the short base is squeezed out. On the other hand, on-chain analyst CryptoVizArt notes that bitcoin's 'True Market Mean' suggests the average active holder is currently underwater, a scenario that has historically aligned with bitcoin's worst periods. While these two perspectives may seem conflicting, a short squeeze triggered by negative funding and a structural drawdown from underwater holders can coexist, with the former potentially sparking an outsized rally that is eventually sold into by the latter. The dominant scenario will likely depend on whether the US-Iran ceasefire extension holds beyond next week.