What is a Bitcoin Liquidation Heatmap? A Bitcoin Liquidation Heatmap is a visual representation of liquidation levels price levels where large numbers of leveraged long or short positions may be forcibly closed (liquidated) by exchanges . Colors/Heat Intensity: Indicate areas of high liquidation potential. Red or Bright Zones: High concentration of open interest or liquidation clusters. Dark Zones: Less trading activity or liquidation interest. Horizontal Axis: Time (usually in hours/days). Vertical Axis: Bitcoin price levels. Overlays: Often includes real-time price, long/short liquidation events, and funding rates. Why Do Liquidations Happen? Traders often use leverage (borrowed funds) to open positions. If the price moves against their trade beyond a certain threshold, their positions are liquidated (force-closed to prevent further losses to the lender). Long Position Liquidated: If price drops. Short Position Liquidated: If price rises. These levels create liquidity po...