Cryptocurrencies were mostly lower on Monday, although market conditions have stabilized following the weekend sell-off. Bitcoin was trading above its 200-day moving average (currently at $46,386), which suggests selling pressure could wane over the short term.

Analysts pointed out that excess leverage in the bitcoin futures market contributed to the broad sell-off. And despite room for a short-term price bounce, some analysts remain cautious about bitcoin’s price direction over the next few weeks.

“The previous two times that BTC challenged the 200-day moving average served as good buying opportunities, as the market remained structurally bullish but was simply over-leveraged.” Sean Farrell, a digital strategist at Fundstrat Global Advisors, wrote in a newsletter.

“It must be noted, though, that one of the key bitcoin bull market indicators – the 20-week simple moving average – has now been decisively breached so the outlook is currently bearish in the short to medium term,” Anto Paroian, chief operating officer at crypto hedge fund ARK36, wrote in an email to CoinDesk.

“The violent price move in the digital asset market may also suggest that some investors are preparing to go into a risk-off mode for the time being,” Paroian wrote.

Still, it appears that some investors are comfortable with rotating back into speculative assets. For example, traditional equities stabilized on Monday as volatility declined. And in crypto markets, alternative coins such as ether, Polygon’s MATIC token and Solana’s SOL token have outperformed bitcoin over the past week, suggesting investors’ greater appetite for risk.

The chart below shows the largest one-day decline in BTC futures open interest since Sept. 7. And blockchain data suggests the sell-off accelerated as the BTC price dipped below break-even levels (cost basis) for many traders holding long positions.

“Bitcoin short term holders’ cost basis was sitting at $53K, and once we broke through that level, there was another big leg down,” Martha Reyes, head of research at digital asset prime brokerage and exchange BEQUANT.io, said.

Bitcoin has dropped nearly 30% from its all-time price of around $69,000, which is the largest drawdown (percent decline from peak to trough) since September. Typically, bitcoin experiences sharp drawdowns between 10%-20% even in a bull market. In a bear market, however, drawdowns can extend well beyond 30%, and the price can take several months to recover.

Most digital assets in the CoinDesk 20 ended the day lower.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

Notable losers: