Bitcoin traded 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 stalled before the US-Iran ceasefire expires next week.
Ether fell 1.4% to $2,327, but still leads the major currencies on the weekly chart by 6%, extending the outperformance that emerged earlier this week. XRP held at $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 an all-time 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 give up its nuclear ambitions, hand over nuclear material and reopen the Strait of Hormuz as part of the deal. Iran has not confirmed those concessions.
A 10-day ceasefire between Israel and Lebanon was announced separately on Thursday, with Israeli Prime Minister Benjamin Netanyahu confirming the truce 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 unwound most of the war premium while crude oil remains near $98 and the Strait of Hormuz is still effectively closed.
However, some traders are paying attention to the setup underlying Bitcoin’s flat price action.
Bitcoin perpetual funding rates have turned deeply negative in recent sessions, reaching levels last seen in 2023. Funding is the periodic payment that perpetual futures traders exchange with each other to keep contract prices aligned with spot prices. When it turns negative, the shorts pay the longs, which only happens when the market is strongly positioned against the price.
“Such negative funding rates indicate that the market is very short,” said Daniel Reis-Faria, CEO of ZeroStack, in a note shared with CoinDesk. “If Bitcoin continues to rise despite that, many of those positions could be liquidated and the movement may accelerate quickly.”
Reis-Faria expects that bitcoin can reach $125,000 in the next 30 to 60 days if the short base is removed.
“It’s a reminder that no matter how many short positions there are in the market, the amount of buying pressure, especially from large companies, can squeeze those positions,” he said.
The contrarian read from on-chain analyst CryptoVizArt is that bitcoin’s “true market average,” a metric that estimates the average cost basis of active investors by filtering out lost and inactive coins, suggests the average active holder is currently underwater.
Since 2016, significant stretches below the true market average have aligned with bitcoin’s worst periods, including the 2018-19 bear (-57% peak drop, 282 days) and the 2022-23 crash after the Luna and FTX collapse (-56%, 339 days).
The two readings do not have to be in conflict. Both a brief contraction due to negative financing and a structural reduction by underwater holders can be true, with the former triggering the type of outsized rally that ultimately ends up being sold by the latter.
The dominant scenario will likely depend on whether the extension of the US-Iran ceasefire holds beyond next week.
