📊 What is a Liquidation Heatmap, and How Does It Help in Trading?

A liquidation heatmap shows where high-leverage positions are concentrated. These are zones where traders with long or short positions could be forced to close due to price movements.

🟡 Yellow zones on the map represent the largest concentration of long liquidations.
🟢 Green zones indicate moderate volumes of long liquidations.
🟣 Purple zones highlight short liquidations.

💡 Why is this useful for traders?
- Identify Potential Reversal Zones: When the price approaches key liquidation zones, sharp moves up or down are likely.
- Manage Risks: Avoid opening positions near bright zones to prevent being caught in volatile price swings.
- Use Zones for Entry and Exit Points: After major liquidations, the market often stabilizes, providing opportunities for profitable entries or exits.
- Analyze market sentiment: Studying liquidation zones helps in understanding the current market sentiment.