Liquidation Heatmap & Level Analysis

Overview

Analyze the distribution of leveraged positions and their liquidation price levels to identify zones where forced selling/buying will accelerate price moves. Liquidation clusters act as "magnets" — price tends to be attracted toward large liquidation concentrations because market makers and whales profit from triggering cascading liquidations.

Core Concepts

1. Liquidation Mechanics

How liquidation works:

# Long position liquidation
long_liquidation_price = entry_price * (1 - 1/leverage + maintenance_margin)

# Short position liquidation
short_liquidation_price = entry_price * (1 + 1/leverage - maintenance_margin)