Bitcoin was trading around $74,700 Friday morning in Asia, down 0.4% over 24 hours but still up 3.5% over the week, as a 10-day rally in global stocks came to a halt ahead of the expiration of the ceasefire between the United States and Iran next week.
Ether lost 1.4% to $2,327, but remains ahead of the majors on the weekly band at 6%, extending the outperformance that appeared earlier this 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 slipping 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 looked “very good.”
Trump claimed, without evidence, that Tehran agreed to abandon its nuclear ambitions, return nuclear materials 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 truce in a video message. Markets are hyping headlines as if the deal is closer than it is, which is part of the reason stocks have wiped out most of the war bounty while crude remains near $98 and the Strait of Hormuz is still effectively closed.
However, the pattern underlying Bitcoin’s flat 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 that perpetual futures traders exchange with each other to keep contract prices aligned with spot prices. When it turns negative, shorts pay longs, which only happens when the market is strongly positioned relative to price.
“Such negative funding rates tell you that the market is very short,” ZeroStack CEO Daniel Reis-Faria said in a note shared with CoinDesk. “If Bitcoin continues to advance despite this, many of these positions could be liquidated and the movement could accelerate quickly.”
Reis-Faria expects that bitcoin could reach $125,000 in the next 30 to 60 days if the short basis is eliminated.
“This reminds us that no matter how much short selling occurs in the market, the amount of buying pressure, especially from large companies, can wipe out these positions,” he said.
The contrarian reading from on-chain analyst CryptoVizArt is that Bitcoin’s “True Market Mean,” a metric that estimates the average cost of active investors by filtering out lost and dormant coins, suggests that the average active holder is currently underwater.
Since 2016, significant periods below the true market average have aligned with Bitcoin’s worst periods, including the 2018-19 decline (-57% peak drawdown, 282 days) and the 2022-23 pullback period after the collapse of Luna and FTX (-56%, 339 days).
The two readings need not conflict. A short squeeze due to negative funding and a structural pullout of underwater holders can both be true, with the former triggering the kind of outsized rally that is ultimately sold out by the latter.
Which scenario dominates will likely depend on whether the ceasefire between the United States and Iran extends beyond next week.
