Bitcoin Prices May Surge to $125,000 as Short Sellers Face Squeeze

Bitcoin was trading at around $74,700 during Asian morning hours on Friday, experiencing a minor 0.4% drop over the past 24 hours but still maintaining a 3.5% weekly gain. This comes as a 10-day rally in global equities paused ahead of the upcoming U.S.-Iran ceasefire expiry. Meanwhile, Ether saw a 1.4% decline to $2,327 but continued to lead the 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 seeing a 5.6% weekly increase 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 prospects for a permanent Iran ceasefire were 'looking very good.' Despite the lack of confirmation from Iran, markets are responding to the headlines as if a deal is imminent, leading to the unwinding of most of the war premium in equities. However, crude remains near $98, and the Strait of Hormuz is still effectively shut. Beneath the surface of the relatively flat bitcoin price action, some traders are focusing on the setup. Bitcoin perpetual funding rates have turned deeply negative, reaching levels last seen in 2023. This indicates that the market is heavily positioned against the price, with shorts paying longs. 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' suggests the average active holder is currently underwater. Historically, meaningful stretches below the True Market Mean have aligned with bitcoin's worst periods. While these two perspectives may seem conflicting, they can both be true, with a short squeeze triggering a significant rally that is eventually sold into by underwater holders. The dominant scenario likely depends on whether the U.S.-Iran ceasefire extension holds past next week.