Bitcoin was trading around $74,700 in early Asian trade on Friday, down 0.4% in 24 hours but still up 3.5% for the week as global stocks paused a 10-day rally ahead of the expiration of a U.S.-Iran ceasefire next week.
Ethereum price retreated 1.4% to $2,327, but still led major currencies with a 6% weekly gain, continuing the outperformance seen earlier in the week. XRP remained at $1.43, with a weekly increase of 6.4%; solana rose 2.7% to $87.67; BNB rose 0.7% to $629.89; Dogecoin rose 5.6% this week to $0.0976.
The MSCI All Country World Index closed at a record high on Thursday before falling 0.1% in Asia. The S&P 500 also hit a record high. Brent crude fell 1.2% to $98.20 after President Donald Trump said prospects for a permanent ceasefire in Iran “look very good.”
Trump claimed without evidence that Tehran had agreed to abandon its nuclear ambitions, hand over nuclear material and reopen the Strait of Hormuz as part of the deal. Iran has not confirmed the concessions.
Israel and Lebanon each announced 10-day ceasefires on Thursday, which were confirmed by Israeli Prime Minister Benjamin Netanyahu in a video message. Headlines in the market appear to be closer to a deal than reality, which is part of the reason why stocks have unwound much of the war premium, while crude oil remains around $98 and the Strait of Hormuz remains effectively closed.
However, the setup behind Bitcoin’s flat price is what some traders are paying attention to.
Bitcoin perpetual funding rates have turned significantly negative in recent trading days, reaching levels last seen in 2023. Financing is the periodic payments that perpetual futures traders exchange with each other to keep the contract price consistent with the spot price. When it becomes negative, the shorts pay the longs, which can only happen if the market moves heavily against the price.
“Such negative funding rates indicate a severe shortage in the market,” ZeroStack CEO Daniel Reis-Faria said in a report shared with CoinDesk. “Nonetheless, if Bitcoin continues to move higher, many of these positions will likely be liquidated, and the move could accelerate quickly.”
Reis-Faria predicts that Bitcoin could reach $125,000 in the next 30 to 60 days if the short base is squeezed out.
“This is a reminder that no matter how many shorts there are in the market, the amount of buying pressure, especially from the big names, can squeeze out those positions,” he said.
A contrarian interpretation from on-chain analyst CryptoVizArt is that Bitcoin’s “real market mean,” a metric that estimates active investors’ average cost basis by filtering out lost and dormant coins, suggests that the average active holder is currently underwater.
Since 2016, meaningful ranges below the true market mean have been consistent with Bitcoin’s worst periods, including the 2018-19 bear market (-57% maximum drawdown, 282 days) and the 2022-23 drawdown after the Luna and FTX collapses (-56%, 339 days).
The two readings need not conflict. Both a short squeeze caused by negative funding and a structural pullback by underwater holders could be real, with the former triggering a massive rally that was ultimately sold off by the latter.
Which scenario prevails may depend on whether the U.S.-Iran ceasefire lasts beyond next week.
