GlossaryLiquidation heatmap
Liquidation heatmap
The liquidation heatmap estimates the prices at which leveraged positions opened in past candles would be liquidated. The brighter a cell, the more estimated volume is resting there. It is a model based on open interest, volume and candles, not a measured quantity, which is why the legend says “estimated”.
How to read it
- Yellow bands are the largest estimated accumulations in view. Many traders read them as targets, because forced orders would provide liquidity there. When the price runs through, the band disappears.
- Below the price are mainly long liquidations, above it short liquidations. The magnifier shows the split.
- The newest column continues to the right edge. With Profile at right edge, it also appears there as a bar profile, the largest step 120 pixels long (on narrow charts, 14% of the chart width), the others in proportion.
- The magnifier opens when you hover over a drawn cell: seven steps around the cell for the previous, the current and the next candle, and below them the step's price range, the amount and its share of longs and shorts.
- Since the colors are relative, the same color in two views does not mean the same amount. For absolute values, use the magnifier.
Limitations
- The leverage distribution and the 95% distance are fixed assumptions, not a measurement. The model does not know entry prices, partial closes, margin top-ups or stops.
- The heatmap does not draw candles before the start of the open interest history. They are shaded gray, and “OI history from …” names the start. Their volume levels can live on in later columns. If there is no open interest at all for a symbol, the model runs on the volume share alone.
- Step height and grid depend on the range of all loaded candles. If the chart loads more candles as you scroll back, the image can therefore shift slightly.
- On very short timeframes, open interest is often coarser than the candles. A rise then lands all at once in one candle.