Bitcoin prices eye $125,000 as US-Iran peace talks fuel market optimism

Bitcoin was trading at approximately $74,700 in Asian morning hours on Friday, experiencing a minor 0.4% decline over 24 hours but still maintaining a 3.5% weekly gain, as the 10-day global equities rally paused ahead of the impending US-Iran ceasefire deadline. Meanwhile, Ether dropped 1.4% to $2,327 but continued to outperform other major cryptocurrencies with a 6% weekly gain. 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 surging 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 achieved an all-time high. However, Brent crude fell 1.2% to $98.20 following President Donald Trump's statement that a permanent Iran ceasefire was 'looking very good.' Despite the lack of confirmation from Iran, markets are reacting positively to the headlines. A 10-day ceasefire between Israel and Lebanon was also announced, with Israeli Prime Minister Benjamin Netanyahu confirming the truce. While equities have largely unwound their war premium, crude remains near $98, and the Strait of Hormuz is still effectively shut. Beneath the surface of bitcoin's flat price action, some traders are focusing on the deeply negative 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. If bitcoin prices continue to rise despite this, a significant number of short positions could be liquidated, potentially 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. However, on-chain analyst CryptoVizArt notes that bitcoin's 'True Market Mean' suggests the average active holder is currently underwater, which has historically aligned with bitcoin's worst periods. While these two perspectives 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.