Last week I maintained my bullish directional biases even in the face of another down leg in crypto markets. Today, we're monitoring an increasing number of failed breakdowns, meaning that bulls are once again asserting control of the tape.

The lackluster action in crypto markets has continued. This is even in the face of yesterday's action that saw the US dollar continue it sell off as small-caps and market breadth saw its most productive day the entire year.

A few weeks ago, stories of Mt Gox were once again reappearing as the cold wallet associated with the defunct exchange had began its process of distributing the coins out to customers.

Just like the SEC when it comes to approving ETFs, Mt Gox has repeatedly pushed the deadline ahead numerous times. In fact, the entire Mt Gox saga has become a classic piece of FUD throughout Bitcoin's history that has created a lot of fear among traders and investors.

The simple idea is that there is over $9B worth of Bitcoin that are being distributed to Bitcoin holders for the first time in a decade. Considering the massive profits they're sitting on, many people have pondered whether there will be a mass exodus of investors taking profits and hitting sell.

While this would no doubt be a headwind, I want to take a step back and put this all into context. It's important that as this story develops over the coming months we let data inform our decisions, not emotions.

Crypto markets have continued their sell-off into last week, with Bitcoin losing the critical 60,000 support level and the total crypto market-cap briefly dipping below $2T for the first time since February.

The crypto asset class is selling off hard.

This time last week, I was arguing a reset had taken place and with Bitcoin testing support, it was a logical place to see buyers step in. As of the writing of this letter, Bitcoin is making new three month lows.

Following this, I want to see a few scenarios play out before entering back into longs with any conviction.

Altcoins are being slaughtered; I keep pointing to the tendency for such topping patterns to fail in the context of bull markets. But again, I need to see the market prove this thesis before acting on it.

There is also a significant divergence brewing between macro and crypto markets.

I've been maintaining a neutral short-term bias for the last five weeks, which has helped us keep away from much of the precarious action over this period. But I'm seeing mounting signs that point to a tradable low being carved, and as such, I'm changing our short-term bias from neutral to bullish.

Bitcoin is finding support at a key level alongside many altcoins. Further, this is within the context of a wider reset in a longer-term bull market.

There's plenty of bearish action taking place in the crypto market. Many coins are breaking down and the technicals are carving out topping patterns.

But in the face of this weakness, I emphasize we're still in a longer-term bull market and selloffs like these have been favorable buying opportunities for traders.