Updated 2026-07-23
What is a liquidation heatmap?
A liquidation heatmap is a map of the price levels where leveraged perpetual-futures positions are most likely to be force-closed. When a trader uses leverage, the exchange sets a liquidation price: if price reaches it, the position is closed automatically to prevent the account going negative. A heatmap estimates, across the whole market, where large clusters of those liquidation prices sit above and below the current price.
The brighter or taller a zone on the map, the more leveraged size is estimated to be resting there. Those zones matter because a move into a dense cluster can trigger a chain of forced closes, which pushes price further into the next cluster. That is the mechanism traders call a liquidation cascade.
How to read a liquidation heatmap
Reading a heatmap comes down to four questions:
- Where are the dense zones relative to price? Clusters above price are where short positions get liquidated on a rally. Clusters below are where longs get liquidated on a drop.
- How far away is the nearest big zone? A dense cluster just above or below the current price is a nearer-term magnet than one several percent away.
- Which side is heavier? If far more leverage is stacked below than above, a flush lower has more fuel, and vice versa.
- Is the zone a level or a wall? A single sharp level behaves differently from a broad band of stacked leverage that can absorb a move.
On the Hunter Killer Money Map, these zones are drawn as a live, colour-graded heatmap over the price chart so the nearest magnets are obvious at a glance.
Liquidation levels vs liquidation magnets
A liquidation level is a single estimated price where a batch of positions would be force-closed. A liquidation magnet is a level dense enough that price appears drawn toward it, because the forced flow at that level tends to accelerate price into the zone rather than away from it.
Magnets are the actionable idea: they are not a prediction that price will arrive, but a description of where the structural pull is strongest right now. Treating a magnet as a certainty is the classic mistake. It is a probability-weighted zone, not a guarantee.
What a liquidation heatmap cannot tell you
Heatmaps are estimates built from open interest, funding, and price data. No public tool sees every position on every venue, so every heatmap is a model, not a ledger. Be honest with yourself about the limits:
- It is descriptive, not a forecast. It tells you where leverage is stacked, not what price will do next.
- Different providers use different estimation methods, so two heatmaps of the same coin can disagree.
- A zone can sit untouched for days, or price can slice through it without a cascade if the leverage was already reduced.
This is exactly why Hunter Killer publishes a walk-forward accuracy scorecard. Rather than ask you to trust that the map is good, we measure how often our liquidation zones actually get reached, report the sample size and a 95% confidence interval, and put those numbers in public before you pay.
Using a heatmap in your trading
Most traders use a liquidation heatmap as decision support, not a signal generator. Common uses:
- Placing stops and targets with awareness of nearby magnet zones, so a stop is not sitting exactly where a cascade would run it.
- Framing risk by knowing which direction has more liquidation fuel.
- Context for entries, treating a dense magnet as a potential reaction zone rather than a green light.
The heatmap is one input into a disciplined process. It is not an edge on its own. If you want a live view, the Money Map shows the current heatmap for the majors, and the free Discipline Coach reviews your own trade history against your rules.