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The Liquidation Heatmap visualizes price levels in the cryptocurrency market where there are large leveraged positions. If the price reaches a certain level, these positions may be liquidated. 👋

The data is time-stamped and the range represents a 7-day period.

The colors on the heat map represent the density of liquidation orders.

  • Darker colors generally indicate fewer orders.

  • Brighter colors indicate more orders 👀

  • Bright yellow bars on the chart indicate a large concentration of liquidation orders at a particular price level.

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How traders use it:

Liquidation heatmaps allow traders to identify areas of high liquidity, which can help in different ways:

  • Magnetic Zones: A high concentration of potential liquidation levels in a particular price range may indicate that price may move towards that area. Some traders use these liquidation levels as a measure of which way price is more likely to go along with other indicators that can be used as confluence.

  • Support/Resistance Zones: In areas of high liquidation, larger traders “whales” can execute trades quickly at favorable prices. Once they enter or exit an order with this liquidity, the price can now reverse.

  • Additionally, liquidation levels can create significant pressure on the buy or sell side of the order book, leading to a natural reversal in price.