Ethereum Liquidation Heatmap Model 4

See where leveraged traders are most likely to be forced out of their positions.

What is a liquidation heatmap?

Many traders use leverage. When price moves against a leveraged position far enough, the exchange closes it by force. This is called a liquidation, and the price where it happens is the liquidation level. Because forced closes are market orders, clusters of liquidations can add fuel to a move or cause sharp reversals.

A liquidation heatmap shows where those levels are likely to sit. The brighter an area, the more estimated liquidation levels are stacked at that price.

Model 4

How the map is built

Nobody can see other traders’ exact positions, so the levels are estimated from market data. Brightness is relative: each level is compared with the others in view, not with a fixed number.

Magnet zones

Bright bands attract price

Bright bands above or below price often act as targets, because price tends to be drawn toward pools of liquidity.

Reaction zones

Watch what happens next

When price reaches a bright band, a stall, a spike or a reversal can show whether the liquidations were absorbed or whether the move continues.

Combine it with other signals

The chart above also shows footprint absorption and exhaustion markers and a histogram of real liquidations, so you can compare the estimate with what actually got liquidated.

Estimate, not exact data. The heatmap shows where liquidations may start, not how many will happen. For educational purposes only, not financial advice.