Bitcoin was trading around $74,700 in Asian morning hours on Friday, down 0.4% over 24 hours but still up 3.5% on the week, as a 10-day rally in global stocks halted ahead of next week’s expiration of the U.S.-Iran ceasefire.
Ether returned 1.4% to $2,327, but still leads the majors on the weekly band by 6%, extending the outperformance that occurred earlier in the week. XRP held $1.43 with a weekly gain of 6.4%, solana rose 2.7% to $87.67, BNB added 0.7% to $629.89 and dogecoin rose 5.6% on the 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 Iran ceasefire “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 these concessions.
A 10-day ceasefire between Israel and Lebanon was announced separately on Thursday, with Israeli Prime Minister Benjamin Netanyahu confirming the ceasefire in a video message. Markets are trading the headlines as if the deal is closer than it is, which is part of the reason stocks have given up most of the war premium while crude remains near $98 and the Strait of Hormuz is still effectively closed.
But the setup below the flat bitcoin price action is what some traders are paying attention to.
Bitcoin perpetual funding rates have turned deeply negative in recent sessions, reaching levels last seen in 2023. Funding is the periodic payment perpetual futures traders exchange with each other to keep contract prices in line with the spot. When it goes negative, shorts are paying longs, which only happens when the market is strongly positioned relative to price.
“This negative funding rate tells you that the market is very short,” said Daniel Reis-Faria, CEO of ZeroStack, in a note shared with CoinDesk. “If Bitcoin continues to move higher despite that, many of these positions could be liquidated and the move could accelerate quickly.”
Reis-Faria expects bitcoin to reach $125,000 in the next 30 to 60 days if the short base is squeezed out.
“It’s a reminder that no matter how much shorting there is in the market, the amount of buying pressure, especially from large companies, can squeeze those positions out,” he said.
The opposite read from on-chain analyst CryptoVizArt is that bitcoin’s “True Market Mean,” a metric that estimates the average cost basis of active investors by filtering out lost and dormant coins, suggests that the average active holder is currently underwater.
Since 2016, meaningful stretches below the true market mean have aligned with bitcoin’s worst periods, including the 2018-19 bear (-57% max move, 282 days) and the 2022-23 relaxation after Luna and FTX collapses (-56%, 339 days).
The two readings need not conflict. A short squeeze from negative financing and a structural pullback from underwater holders could both be true, with the former triggering the kind of outsized rally that the latter is ultimately sold for.
Which scenario is likely to dominate depends on whether the extension of the US-Iran ceasefire lasts next week.
