The Market’s X-Ray: Liquidation Heatmaps

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The Market’s X-Ray: Liquidation Heatmaps

 

Trading Guide · Liquidation Heatmaps

Heatmaps reveal exactly where leveraged positions will be force-closed. Because price is magnetically drawn to those zones, reading them correctly transforms noise into a repeatable edge.

Liquidation Heatmap — Schematic View
BTC/USDT

$109,500

$109,000

$108,400

$108,000

$107,600

◄ CURRENT PRICE

$107,100

$106,500

$106,000

$105,500

Short liquidations (above price)
Long liquidations (below price)
Bar width = cluster density

01 · What It Is

How Liquidation Heatmaps Work

Every leveraged position has a liquidation price — the level at which the exchange force-closes it. A heatmap aggregates millions of those prices across the market and visualizes their density. Bright bars = heavy cluster. Thin bars = sparse liquidity.

Large players need deep pools of liquidity to fill big orders without slippage. So they drive price toward the densest zones, trigger the cascade of forced closes, and use that flow to fill their own positions — then reverse.

⚡ Core Mechanic

Price doesn’t move randomly. It gravitates toward where the most forced orders are waiting, sweeps them, then reverses. Heatmaps show you those targets before they’re hit.

02 · How to Use It

4 Practical Applications

01

Find the magnet zone. Bright cluster 2–3% away from price? Don’t fight the pull. Expect price to gravitate there before any significant reversal. Trade toward the target, not against it.

02

Wait for the sweep, not the breakout. When price spikes into a dense zone and immediately wicks back, liquidations are cleared (“swept”). Enter on the reversal candle after the flush — not the breakout into the cluster.

03

Place stops in the dark zones. Never park your stop inside a bright cluster — a cascade will spike right through it. Find the low-density area beyond the cluster. If price reaches that quiet zone, the trend has genuinely shifted.

04

Read directional bias. Heavy clusters above = overleveraged shorts = short squeeze fuel. Heavy clusters below = top-heavy longs = flash-crash risk. The heatmap tells you which side has more “ammo.”

03 · Signal Reference

Read the Signal, Take the Action

What You See What It Means Action
🔴 Heavy cluster above price Mass of short liquidations waiting ▲ Long bias
— short squeeze rally likely
🔵 Heavy cluster below price Mass of long liquidations waiting ▼ Short bias
— long squeeze dip likely
⚡ Price hits hot zone & reverses Liquidity swept, smart money filled ↩ Reversal entry
— high probability setup
💤 Thin, scattered clusters Low leverage, no clear targets — Avoid
— choppy range expected

altFINS will launch Liquidation Heat Map in 2026!

⚠ The Override Rule

Heatmaps show where price is attracted, not where it will definitely go. Always pair them with price action confirmation — a reversal candle, volume spike, or key support/resistance level. The heatmap narrows your zone; price action confirms your entry.

altFINS
Trading Education

For educational purposes only. Not financial advice.
Trading leveraged products carries substantial risk.