Liquidation Heatmaps Explained

In crypto futures, traders borrow to trade with leverage. If price moves against them far enough, the exchange closes the position — a liquidation. A liquidation heatmap estimates where those forced closes might cluster.

Why liquidations matter

A liquidation is a market order the trader did not choose to place. A long position being liquidated becomes a forced sell; a short becomes a forced buy. When many positions share similar liquidation prices, reaching that area can trigger a cascade: forced orders push price further, which liquidates more positions. That is why sharp wicks often appear near crowded levels.

How the levels are estimated

Exchanges do not publish everyone's positions, so any heatmap is a model. The common approach, and the one OrderView uses, works from public data:

1. When open interest (the total of open futures positions) rises during a candle, new positions were opened near that candle's price.
2. The split between longs and shorts is estimated from the candle's taker buying and selling.
3. For typical leverage levels — 10×, 25×, 50× and 100× — the price at which those positions would be liquidated is calculated and added to the map.
4. A level stops being drawn once price has traded through it, since those positions would already be gone.

Brighter bands mean more estimated positions at that price.

How traders read it

• Large bright bands above price suggest many shorts could be forced to buy there; below price, many longs could be forced to sell.
• Price often moves toward large clusters, sometimes with a quick wick through them, before reversing.
• Clusters that line up with support, resistance or round numbers attract the most attention.

The limits

• It is an estimate. Real positions use many leverage levels, add margin, or close early.
• It covers one exchange's data. Positions on other exchanges are not included.
• It describes where pressure could appear, not where price will go.

The liquidation heatmap in OrderView is built from Binance USDⓈ-M futures data and is available in the Android app. Educational information only, not investment advice.