Bitcoin (BTC) swapped bullish gains for chop into Jan. 31 as the end of the month saw nervous price action.

$46 million of longs liquidated

Data from Cointelegraph Markets Pro and TradingView tracked a less confident BTC/USD as it briefly wicked to just above $22,500 on Bitstamp overnight.

A rebound saw the pair flip $23,000 to short-term resistance, and was still trading below that level at the time of writing.

The stakes remained high for traders, long and short, with the monthly close just hours away. This was followed by interest rate decisions from the United States Federal Reserve on Feb. 1, along with the European Central Bank a day later.

With volatility likely lying in wait, liquidations mounted despite Bitcoin maintaining a fairly narrow trading range.

The trip to $22,500 sparked $46 million of long liquidations on Jan. 30, which according to data from Coinglass was the highest daily total of 2023 so far.

Further data from on-chain analytics resource Material Indicators meanwhile highlighted the tense situation on the Binance order book.

Bid and ask liquidity remained in flux, with incremental shifts up and down having a tangible impact on BTC price trajectory. Bids just below $22,000 and asks at $24,000 kept BTC/USD in check.

“It’s worth noting that this is the same block of bids that have been pushing BTC price for weeks and because it’s prone to move, could end up getting rugged,” Material Indicators commented in a Twitter thread on Jan. 30.

Continuing, the analysis said that the location of the liquidity was “no coincidence,” singling out Bitcoin’s old all-time high from 2017 as a “last stand” support zone should current levels fail to hold.

Crypto traders stem “dry powder” inflows

Catalysts for a Bitcoin and altcoin comedown had already been mounting at the week’s Wall Street open.

Related: Best January since 2013? 5 things to know in Bitcoin this week

U.S. equities lost ground on Jan. 30, with marketwide nerves over the Fed showing themselves in decreased risk appetite.

This was also conspicuous on crypto exchanges as stablecoin deposits cooled, reducing what one analyst called “dry powder” available for deployment into crypto assets.

“Right now there is a negative correlation between price and stablecoin deposits. Of course, this is not the only one indicator which we need to check but Fed meeting will be held within this week and we also see this negative correlation,“ Kripto Mevsimi, a contributor to on-chain analytics platform CryptoQuant, summarized in a blog post.

“We can expect high volatility within this week however we need to be careful since there is not much dry powder coming into exchanges anymore.“

An accompanying chart showed a divergence in stablecoin deposits relative to BTC/USD growth in the second half of January.

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