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

Bitcoin was trading at around $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 a 10-day rally in global equities paused ahead of the US-Iran ceasefire expiry next week. 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 gain, Solana rising 2.7% to $87.67, BNB adding 0.7% to $629.89, and Dogecoin increasing 5.6% on the week 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 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. Markets are reacting to the headlines as if a deal is closer than it actually is, 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 focusing 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, such negative funding rates indicate a heavily short-biased market, which could lead to 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. On the other hand, on-chain analyst CryptoVizArt notes that bitcoin's 'True Market Mean' suggests the average active holder is currently underwater, a metric that has historically aligned with bitcoin's worst periods. While these two reads 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 likely depends on whether the US-Iran ceasefire extension holds past next week.