Glossary
What is Liquidation heatmap
An estimate of prices where leveraged liquidations pile up: third-party services model it from open interest and leverage, so it is a model, not exchange data.
How it works
Example
Price is 62,400 and the map shows a cluster of short liquidations at 64,000. The distance is 1,600, or 1,600 / 62,400 ≈ 2.6% up. Price may get there, or not.
Common mistake
Treating the map as fact and placing a stop "behind the cluster": the leverage on it is guessed, and those positions may be closed by the time price arrives.
Read next
Related terms
Frequently asked questions
- Where can I learn Liquidation heatmap step by step?
- In the Trading OS Academy: “Leverage is sizing, not greed”, “Where the crowd's stops sit”.
- What is Liquidation heatmap related to?
- Liquidation; Liquidity; Open interest; Squeeze.
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