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Other major cryptocurrencies also suffered on Friday. XRP, the second largest by market value, was down 7 percent while ether fell 11 percent.

Timothy Tam, CEO of cryptpocurrency research firm CoinFi, said bitcoin’s large move downward was a “combination” of factors.

On Thursday, the SEC extended their review period of a much-awaited bitcoin ETF until February 27. While Gabor Gurbacs, who’s spearheading the bitcoin ETF effort at VanEck, said the move was “expected” — the market still reacted.

“Historically there is price correlation with expectation of an ETF approval and downward movement when the ETF gets rejected or delayed,” Tam told CNBC Friday. “Sentiment among retail investors in the crypto space is already negative, so any negative news like this generates an overreaction.”

Michael Moro, CEO of Genesis Trading, said unlike prior weeks with drama in another cryptocurrency bitcoin cash, this week’s moves don’t appear to be event-driven.

“It looks like a continuation of the momentum trade that it has been for all of 2018,” Moro said. “Short interest has continued to spike, as trading firms look to take advantage of the volatility.”

Moro has also seen an uptick in selling by some long-term bitcoin holders.

“The general market sentiment seems to be that this ‘crypto winter’ could last for some time; not too many people are expecting a V-shaped recovery in 2019,” he said.



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US advisor Bolton promises India support after Kashmir attack

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National Security Advisor John Bolton answers questions from reporters as he announces that the U.S. will withdraw from a treaty with Iran during a news conference in the White House briefing room in Washington, October 3, 2018. 

Jonathan Ernst | Reuters

National Security Advisor John Bolton answers questions from reporters as he announces that the U.S. will withdraw from a treaty with Iran during a news conference in the White House briefing room in Washington, October 3, 2018. 

U.S. National Security Advisor John Bolton spoke to his Indian counterpart promising support to bring those responsible for a deadly car bombing in disputed Kashmir to justice, the Indian Foreign Ministry said on Saturday.

A Pakistan-based militant group, Jaish-e-Mohammad, has claimed responsibility for the attack on a military convoy in which 44 paramilitary police were killed, raising tensions with India.

Bolton told Ajit Doval in a telephone conversation that the United States supported India’s right to self-defense against cross-border terrorism, the Indian Foreign Ministry said in a statement.

India has demanded Pakistan act against the Jaish. Pakistan had condemned the attack but denied any complicity.

“The two NSAs vowed to work together to ensure that Pakistan cease to be a safe haven for JeM and terrorist groups that target India, the U.S. and others in the region,” the ministry said.

“They resolved to hold Pakistan to account for its obligations under U.N. resolutions.”

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US-China trade talks ‘making a final sprint’: Chinese state media

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Chinese state media on Saturday expressed cautious optimism over trade talks between the United States and China, a day after President Xi Jinping said a week of discussions had produced “step-by-step” progress.

Xi made the comments at a meeting on Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Beijing, after a week of senior- and deputy-level talks.

The People’s Daily, the official paper of the ruling Communist Party, said in a commentary that Xi’s meeting with U.S. negotiators had affirmed progress made in previous talks and “injected new impetus into the next stage of the development of Sino-U.S. trade relations.”

The talks “have made important progress” for the next round of negotiations in Washington next week, the paper said in its domestic edition.

“It is hoped that the two sides will maintain the good momentum of the current consultations and strive to reach an agreement within the set time limit,” it said.

U.S. duties on $200 billion in imports from China are set to rise to 25 percent from 10 percent if there is no deal by March 1 to address U.S. demands that China curb forced technology transfers and better enforce intellectual property rights.

In its overseas edition, the People’s Daily said “zero-sum thinking and games where you lose and I win can only create losses for both. Only on a basis of mutual respect and equal treatment, through dialogue and consultation, can we find a solution acceptable to both sides.”

An English-language editorial in the Global Times, which is published by the People’s Daily, said news that China had consulted on the text of a memorandum of understanding “shows the two sides have made unprecedented progress.”

“The MOU and next week’s talks both show that the seemingly endless China-U.S. trade negotiations, like a marathon, are making a final sprint,” it said.

The newspapers cautioned that any agreement would have to be in the interests of both the United States and China.

“There are still obstacles to be overcome, and no one should underestimate how daunting a task the two sides face trying to resolve all the differences that have long existed between them in one clean sweep,” the official English-language China Daily said in an editorial.

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Investors may have already missed out on bulk of market’s gains this year

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“Although the peak earnings growth rate for this economic expansion is almost certainly behind us, profit growth peaks have historically been followed by several years of economic growth and stock market gains,” John Lynch, chief investment strategist at LPL Financial, said in a note. “We believe the earnings outlook is strong enough to support solid gains for stocks over the balance of 2019” and the firm is sticking to its 3,000 price target for the S&P 500, implying 9.3 percent upside from Thursday’s close. The median price target on Wall Street this year is 2,950, or about 7.5 percent higher.

Lindsey Bell, investment strategist at CFRA, thinks the markets and earnings picture will need a boost from geopolitics, namely a positive resolution to the U.S.-China trade talks.

“A reduction in tariffs or a better-than-expected trade deal with China could quickly push the market higher because it would result in much better-than-expected economic and earnings growth around the globe,” she wrote. “A worse-than-expected outcome would likely push the market lower as growth expectations continue to be ratcheted lower.”

But Paulsen cautioned about the implications of the tariff talks.

President Donald Trump has been pushing for a reduction in the U.S. trade deficit, which was $49.3 billion in October. But Paulsen said reductions in imports have traditionally come with a weakening economy and a down stock market.

That highlights just one of the obstacles for investors late to the market rally.

“If you’ve been in cash and you want to throw it all in, I certainly wouldn’t do that,” Paulsen said. “But I think it’s OK to be overtilted to the positive side.”

WATCH: S&P 500 surges off December lows, but worrying signs lurk beneath rally

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