Bitcoin price eyes $125,000 as market sentiment shifts amid U.S.-Iran peace talks

Bitcoin was trading at around $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 rally in global equities paused ahead of the upcoming U.S.-Iran ceasefire expiry. Ether dropped 1.4% to $2,327, yet it still leads the major cryptocurrencies on a weekly basis with a 6% gain, extending its outperformance that emerged earlier in the week. Other notable cryptocurrencies include 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 saw 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 regarding the concessions claimed by Trump, markets are reacting to the headlines as if a deal is imminent, resulting in equities unwinding most of the war premium while crude remains near $98 and the Strait of Hormuz remains effectively shut. Nevertheless, the underlying setup beneath the stagnant bitcoin price action is what some traders are focusing on. Bitcoin perpetual funding rates have turned deeply negative, reaching levels last seen in 2023, indicating that 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 reads 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 U.S.-Iran ceasefire extension holds past next week.