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DERIVATIVES

Reading the Liquidation Heatmap

~4 min readMonetum Intelligence Research

Liquidations are not noise — they are structural events. When a leveraged position is force-closed, it creates order flow that has nothing to do with fundamental or technical analysis. Large liquidation clusters often mark local extremes precisely because the forced selling (or buying) exhausts itself at those levels.

The Monetum Intelligence liquidation heatmap gives you real-time visibility into where these events are occurring and at what scale.

What You're Looking At

The heatmap shows forced position closures plotted by price level and time. Intensity indicates the dollar value of liquidations at each price point — brighter zones represent larger forced closures.

Long liquidations occur when leveraged long positions are force-closed during sharp down-moves. A cluster of long liquidations at a price level means a significant number of bulls were stopped out there. These clusters often become support on any subsequent revisit: the weak longs are gone, and re-tests of that level tend to find strong hands buying.

Short liquidations (short squeezes) occur when leveraged shorts are force-closed during sharp up-moves. These clusters often become resistance on re-tests.

The Multi-Exchange Advantage

Most retail data tools only show liquidations from one exchange. Our heatmap aggregates data from:

  • ◆OKX — Live WebSocket stream, real-time individual events
  • ◆Binance — 5-minute aggregated via Coinalyze (Binance's public liquidation API was deprecated in late 2024; institutional-grade data is accessed via aggregator)
  • ◆Bybit — 5-minute aggregated via Coinalyze
Binance is by far the largest derivatives venue — on a normal day, Binance processes 20–30× the liquidation volume of OKX. Showing only OKX would give a systematically incomplete picture of where forced order flow is occurring.

How to Use It in Context

The liquidation heatmap is a context tool, not a signal generator. Its most actionable configurations:

  • ◆Before entering a signal: Check whether recent large liquidation clusters exist near the intended entry, stop loss, or take profit levels.
  • ◆After a sharp move: Large liquidation prints validate the structural significance of that price level. A 500+ BTC liquidation cluster at a specific price means that level will act as a reference point in subsequent sessions.
  • ◆Funding rate divergence: When funding is significantly positive but long liquidations are minimal, the market is leveraged but stops haven't been hit yet — potential energy that can unwind quickly.
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