Bitcoin (BTC) was roughly flat on Monday, while some alternative cryptos (altcoins) underperformed, indicating a lower appetite for risk among traders.

LUNA, Terra's governance token, declined by 18% over the past 24 hours, compared with a 6% drop in GALA and a 5% decline in AVAX and DOT over the same period. Typically, alts decline more than bitcoin in down markets because of their higher risk profile.

Still, the uptick in trading volume during last week's sell-off coupled with fading volatility could point to a brief upswing in crypto prices.

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Technical indicators suggests a weak price recovery for bitcoin, which requires another weekly close above $30,000 to encourage buying activity. Still, the recovery could fade at around $33,000-$35,000 because of negative momentum signals on the charts.

Meanwhile, Terraform Labs CEO Do Kwon released a “revival plan” to save the Terra network after last week’s meltdown. Kwon proposed forking Terra into a new chain without terraUSD (UST). The plan could go into effect if token holders approve it. Read more here.

During last week's UST de-peg, "other major stablecoins such as USDC, BUSD and DAI experienced a 1% to 2% premium as investors moved toward assets they perceived were less at risk of contagion," Glassnode wrote in a blog post. That suggests, for now, that risks surrounding UST have been contained.

Bitcoin's average trading volume last week rose toward its highest level since January. That happened during a time of extreme bearish sentiment.

Trading volume declined over the past weekend, but remains elevated – almost twice as high the average volume levels recorded in April, according to Arcane Research.

Still, in the futures market, bitcoin's open interest, or the total number of derivatives contracts outstanding on the Chicago Mercantile Exchange, continues to decline from its recent peak on March 28. That suggests the recent sell-off emanated from trading activity in the spot market rather than from leveraged traders in the futures market, although liquidations have accelerated the downward price moves.

Bitcoin's implied volatility also remains elevated following last week's sell-off. Further, intraday volatility reached its highest level since May of last year, according to Arcane Research.

"The key contributor to surging intraday volatility tends to be massive destabilizing effects in derivatives with leveraged positions unwinding, causing knock-off effects in all associated markets," Arcane wrote.

Typically, volatility spikes are short-lived, especially if price declines stabilize. Some traders remain cautious because of the weak recovery in crypto and equity prices following last week's sell-off.

QCP Capital, a Singapore-based crypto trading firm, stated that it intends to keep long volatility positions open in anticipation of choppy markets, according to a recent Telegram announcement. The firm is watching for news on the fallout from the Terra stablecoin debacle, which could be a source of additional volatility in the future.

Still, others are looking for opportunities to fade the spike in volatility. "In the short term, spot prices have likely bottomed out while option volatility likely peaked," Greg Magadini, CEO of Genesis Volatility, wrote in a blog post on Sunday.

"Should prices find stability and bounce violently higher, fading the skew is a prime volatility trade," Magadini wrote, referring to the anticipated decline in the relative volatility of put options versus call options.

Morgan Stanley warns about NFTs: The bank said non-fungible tokens (NFTs) may be the next part of crypto requiring re-evaluation after DeFi (decentralized finance) tokens and stablecoins saw liquidations, “as it is becoming clearer that all the elevated prices were traded on speculation, with limited real user demand.” Read more hereUST reserves evaporates: Luna Foundation Guard, the nonprofit that was supposed to save Terra’s stablecoin UST in a crisis, broke its multiday silence and confirmed that its reserve that was once $3 billion mostly held in bitcoin has dwindled to $100 million. As UST fell into a death spiral, LFG said that it sold the reserve to restore UST’s peg and denied allegations that it bailed out insiders with it. Earlier, blockchain analytics firm Elliptic tracked the money to major exchanges Gemini and Binance. Read more hereInvestors flee stablecoins: As the market tries to stomach crypto’s Lehman Brothers moment after UST’s implosion, most stablecoins saw heavy outflows as investors lost confidence. Tether (USDT) has lost $8 billion in market cap in May, and the supply of dai (DAI) dropped 20% and frax (FRAX) almost halved, according to CoinMarketCap data. Meanwhile, the Fantom blockchain’s algorithmic stablecoin, Deus Finance's dei, lost its peg during the day. Read more here

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

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.