The image displays a liquidation heatmap for the Binance $BTC /USDT perpetual contract over a 24-hour period. Here's a simplified explanation of its key components:
1. Background Colors:
The purple background represents areas with low liquidation activity.
The yellow/green bands indicate zones with higher liquidation density, where traders' leveraged positions are getting liquidated (forced exits).
2. Price Levels (Vertical Axis):
The scale on the right (e.g., 90,000 to 95,877) shows Bitcoin's $BTC price levels. The heatmap highlights where traders' positions are most at risk based on leverage and market movement.
3. Liquidation Clusters:
Bright areas, especially near key price levels, suggest that significant liquidations occurred there. These are often points of strong market movement.
4. Implications for Traders:
Such heatmaps help identify zones where price might face resistance or support based on the liquidation of leveraged positions.
For instance, the drop from 92,000 to below 90,000 likely triggered a wave of liquidations, as evident from the intense bands in that range.