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

Bitcoin was trading at around $74,700 during Asian morning hours on Friday, down 0.4% over the past 24 hours but still up 3.5% for the week, as a 10-day rally in global equities paused ahead of the impending US-Iran ceasefire expiry. Meanwhile, Ether dropped 1.4% to $2,327 but maintained its lead among major cryptocurrencies with a 6% weekly gain, extending its outperformance that emerged 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 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. However, Brent crude fell 1.2% to $98.20 after President Donald Trump stated that prospects for a permanent Iran ceasefire were 'looking very good.' Despite the lack of confirmation from Iran, markets are trading on the assumption that a deal is imminent, which has contributed to the unwinding of the war premium in equities. Nevertheless, some traders are focusing on the underlying setup in the bitcoin market, where perpetual funding rates have turned deeply negative, reaching levels last seen in 2023. 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. In contrast, 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, meaningful stretches below the True Market Mean have aligned with bitcoin's worst periods, including the 2018-19 bear market and the 2022-23 unwind after 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 ultimately gets sold into by underwater holders. The dominant scenario will likely depend on whether the US-Iran ceasefire extension holds past next week.