"It has been very volatile today - the moves of last week have spooked a few of the smaller speculative concerns," a fund source said.
Early strength, with the market rising above $3,900 a tonne, was negated by a surprise inventory increase, and in the subsequent retreat prices spiralled to $3,810 at one stage.
Copper stocks rose 5,025 tonnes to 66,500 tonnes, halting a recent run of withdrawals, although cancelled warrants still account for some 14 percent of total LME inventory.
Day-trade covering kick-started a rally, and last three months trade was at $3,856, against Friday's close of $3,830.
Prices ranged between $3,923.50 and $3,810, with electronic screen turnover over 3,500 lots.
"I think the next week or so will be very nervous, and we'll see more moves like the last few days," the fund source said.
On Friday copper fell as low as $3,752, over six percent off Thursday's record high of $4,018, but traders said the market could fall as far as $3,000 without destroying the uptrend.
There was also concern about next week's option expiry fuelling volatility.
"We have November options at $4,200 and $3,800 a tonne strikes," a trader said.
"The granters of the options are trading against them all the time, buying high and selling low, which is costing them a lot of money.
"The volatility will stay until option declaration next week (and) between now and next Wednesday the chances of the market going substantially below $3,800 or much above $4,000 are pretty slim," he said.
There were 1,500 puts at $3,800 and 2,700 calls.
At $4,200 there were 2,970 calls with front month vols below 30 percent.
In other metals, aluminium was at $1,937, up from Friday's close of $1,929, lead rose $20 to $965, while zinc climbed $26 to $1,485.
The other fundamentally sluggish metals were softer, with tin down $50 at $6,200/6,250 and nickel at $11,875 from $11,925.