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

Bitcoin was trading at around $74,700 during Asian morning hours on Friday, down 0.4% over 24 hours but still up 3.5% on the week, as the 10-day rally in global equities paused ahead of the US-Iran ceasefire expiry next week. Ether dropped 1.4% to $2,327 but maintained its lead among major cryptocurrencies with a 6% weekly gain. Other notable performers included XRP, which held 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 was up 5.6% on the week at $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 after President Donald Trump stated that prospects for a permanent Iran ceasefire were 'looking very good.' However, Tehran has not confirmed the concessions claimed by Trump, including giving up nuclear ambitions and reopening the Strait of Hormuz. A 10-day ceasefire between Israel and Lebanon was announced separately, with Israeli Prime Minister Benjamin Netanyahu confirming the truce. Markets are reacting to the headlines as if a deal is imminent, which has contributed to equities unwinding most of the war premium, while crude remains near $98 and the Strait of Hormuz is still effectively shut. Beneath the stagnant bitcoin price action, some traders are focusing on the setup. Bitcoin perpetual funding rates have turned deeply negative, reaching levels last seen in 2023. When funding rates are negative, it indicates that shorts are paying longs, which only occurs when the market is heavily positioned against the price. 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 notes that bitcoin's 'True Market Mean,' which estimates the average cost basis of active investors, suggests the average active holder is currently underwater. Since 2016, meaningful stretches below the True Market Mean have aligned with bitcoin's worst periods. The 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. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.