Bitcoin Prices Eye $125,000 as US-Iran Peace Talks Fuel Risk-On Sentiment

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 the 10-day rally in global equities paused ahead of the upcoming US-Iran ceasefire deadline. 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 following President Donald Trump's statement that prospects for a permanent Iran ceasefire were 'looking very good.' However, it's the underlying market setup that has caught the attention of some traders, with bitcoin perpetual funding rates turning deeply negative in recent sessions, reaching levels last seen in 2023. This negative funding rate indicates that shorts are paying longs, which typically occurs when the market is heavily positioned against the price. 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 suggests that bitcoin's 'True Market Mean,' which estimates the average cost basis of active investors, indicates that 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 potentially triggering an outsized rally that ultimately gets sold into by underwater holders. The dominant scenario likely depends on whether the US-Iran ceasefire extension holds past next week.