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

Bitcoin was trading at approximately $74,700 during 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 equity rally paused ahead of the impending US-Iran ceasefire deadline. Meanwhile, ether dropped 1.4% to $2,327 yet continued to lead major cryptocurrencies with a 6% weekly increase, extending its outperformance from earlier in the week. Other notable movements included XRP holding steady 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 Asian trading, while the S&P 500 also achieved 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,' although Tehran has not confirmed the alleged 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 imminent, contributing to the unwinding of the war premium in equities, while crude oil remains near $98 and the Strait of Hormuz remains closed. However, some traders are focused on the underlying setup, which could potentially trigger a significant price movement. Bitcoin's perpetual funding rates have turned deeply negative, reaching levels last seen in 2023, indicating that the market is heavily short-biased. When funding rates are negative, it means 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 indicate that the market is heavily short. If bitcoin continues to rise despite this, many of those positions could get liquidated, and the price movement 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,' which estimates the average cost basis of active investors by filtering out lost and dormant coins, suggests 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 from negative funding 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.