The leading cryptocurrency, Bitcoin (BTC), is trading around $74,600 after a strong week.
Analysts say the rally has stalled ahead of the expiration of the two-week ceasefire agreement between the US and Iran next week.
However, one analyst predicts that Bitcoin could rise to $125,000 in the coming months.
Speaking to Coindesk, ZeroStack CEO Daniel Reis-Faria stated that perpetual interest rates on Bitcoin are extremely negative, which could trigger a significant price increase.
Noting that Bitcoin’s perpetual term funding rates are quite negative, the analyst said, “this indicates that investors are heavily shorting, expecting a decline.”
According to the analyst, this increases the likelihood of a sharp short squeeze that could push the Bitcoin price towards $125,000 in the coming months.
At this point, Faria believes Bitcoin could reach $125,000 within the next one to two months. Faria bases this prediction on the funding rate of BTC perpetual futures, which has fallen to its lowest level since 2023.
According to the analyst, if the Bitcoin price continues to rise, this could lead to a mass forced liquidation of short positions, causing a short position squeeze that would accelerate the price rally.
*This is not investment advice.