Glossary

Liquidation heatmap

A liquidation heatmap is a chart that estimates the price levels where leveraged positions would be liquidated.

A liquidation heatmap shows price on the vertical axis and time on the horizontal axis. Colors show how much leveraged position would be liquidated at each price level. Brighter colors mean a larger estimated amount. The map is a model output, not a list of real accounts.

The model starts from open interest and assumes common leverage ratios. It then calculates where positions opened at each entry price would be liquidated. The result depends on these assumptions. Real traders use many leverage ratios and add margin or reduce positions during a move.

A bright band marks a level where many forced orders may cluster. Price does not have to go there. Some traders watch these levels as places where volatility may rise. Treat the map as context. Do not treat it as a prediction or a trading instruction.