Bitcoin Prices May Surge to $125,000 Amid U.S.-Iran Peace Talks

The price of bitcoin hovered around $74,700 during Asian morning hours on Friday, experiencing a minor 0.4% decline over 24 hours but maintaining a 3.5% weekly gain, as the 10-day rally in global equities paused ahead of the U.S.-Iran ceasefire expiry next week. Meanwhile, ether dropped 1.4% to $2,327 but continues to lead the majors with a 6% weekly gain, extending its outperformance from earlier in the week. Other notable cryptocurrencies, such as XRP, solana, BNB, and dogecoin, also saw weekly gains of 6.4%, 2.7%, 0.7%, and 5.6%, respectively. The MSCI All Country World Index reached a record high on Thursday before slipping 0.1% in Asia, while the S&P 500 achieved an all-time high. However, brent crude fell 1.2% to $98.20 following President Donald Trump's statement that prospects for a permanent Iran ceasefire looked promising, despite Tehran not confirming any 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, which has led to equities unwinding most of the war premium, while crude remains near $98 and the Strait of Hormuz remains effectively shut. Beneath the stagnant bitcoin price action, some traders are focusing on the 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, such negative funding rates indicate that the market is heavily short, and if bitcoin continues to rise, it could trigger the liquidation of many short positions, accelerating the price movement. 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,' which estimates the average cost basis of active investors, suggests that the average active holder is currently underwater. Historically, periods where the price has fallen below the True Market Mean have coincided with bitcoin's worst periods, including the 2018-19 bear market and the 2022-23 unwind. While these two perspectives may seem conflicting, they can both be true, with a potential short squeeze triggering an outsized rally that is eventually sold into by underwater holders. The dominant scenario will likely depend on whether the U.S.-Iran ceasefire extension holds beyond next week.