📊 What is the Liquidation Heatmap?

The Liquidation Heatmap is a visual representation of where forced liquidations are likely to occur on the Bitcoin perpetual futures market. It highlights price levels where aggressive traders with high leverage may be liquidated if the market moves against them. Real liquidation events are also shown, represented by circles. The size of circles are indication of the value of the liquidation.

🔍 How It Works

• Direction Inference: Determines if a trade was aggressive (long or short) based on its side.
• Notional Size: Estimates the USDT value of a trade to place it into a leverage bracket.
• Estimated Leverage: Dynamically inferred using real-time open interest changes.
• Liquidation Price: Calculated using exchange-provided margin and maintenance data.
• Heatmap Grid: Trades are bucketed into $20 price levels, accumulating risk zones over time.

⚡ How to Use It

• Identify high-risk zones: Bright yellow areas signal dense liquidation zones.
• Watch for invalidation: If price sweeps through a zone, it's likely to be cleared.
• Timing entries: Avoid entering into loaded zones unless positioned for a squeeze.
• Understand market behavior: Clustered zones can indicate upcoming volatility.

🧠 Why It Matters

Liquidation-driven price action is a major driver of volatility in crypto. By visualizing where these liquidity traps are likely to exist, traders gain an edge — especially in high-leverage environments like perpetual futures.

This tool doesn’t just show where orders are — it shows where pain is.