The liquidation heatmap indicator estimates large-scale Bitcoin liquidations based on any changes in the asset’s price.
For today, it is expected that if BTC drops to $40,328, an average of $110 million in long positions will be liquidated.
Large-scale Bitcoin liquidations: what are today’s estimates based on BTC price fluctuations
Coinglass, the platform for aggregated data from crypto exchanges, provides the indicator called liquidation heatmap, which predicts where significant liquidations could occur to help traders find the best liquidity positions.
In the case of Bitcoin, the current situation involves two strong potential large-scale liquidations, which could occur if BTC were to reach certain prices.
And indeed, looking at the chart, if today Bitcoin were to reach $40,328, an average of $110 million in long positions would be liquidated. Not only that, today if BTC were to reach $43,775, the average liquidation of expected long positions would be over $113 million.
The chart in question is updated every 15 minutes and is based on data collected from the Binance crypto-exchange for the BTC/USDT pair.
And indeed, just two days ago, it seems that the estimated liquidation value of Bitcoin longs was eight times higher than today, as reported on X:
“If #Bitcoin reaches $40,600, over $800,000,000 in Longs will be liquidated…”
Large-scale Bitcoin liquidation based on price: how does the liquidation heatmap work?
To put it simply, Coinglass’s liquidation heatmap predicts the price levels at which large-scale liquidation events can occur.
In general, the liquidation event occurs when a trader’s positions are closed due to price fluctuations and the balance of their margin account is not sufficient to cover the open positions.
Here then predicting large-scale liquidation levels can become a benefit for the trader to understand the high liquidity of the order portfolio.
The liquidation heatmap calculates the liquidation levels based on market data and different leverage amounts, creating the corresponding chart with the addition of asset prices.
In turn, traders can use the large-scale liquidation indicator to understand the Magnet Zone and the Support/Resistance Zone.
In the first, the concentration of potential settlement levels within a specific price range may indicate that the price is likely to move towards that zone.
In the second zone, it might be of interest to whales that quickly execute their substantial trading operations when prices are favorable, then causing the price to reverse course.
Bitcoin is now above $43,000
At the time of writing, BTC is worth $43,119 and is experiencing a +4% price pump in the last seven days, and a +15% increase compared to a month ago.
Referring to the Coinglass chart, there are also areas of estimated zero liquidity on a large scale. For example, at the time of writing, if BTC were to reach the price of $45,000 or $39,726, the estimate for liquidation, the liquidation heatmap, is zero.
Anyway, the forecasts for BTC are all optimistic. Recently, the information giant Bloomberg has ventured to predict that the price of Bitcoin will exceed $500,000.
Meanwhile, a few hours ago, the updated Fear and Greed index for Bitcoin was published, which remains in the green zone with a Greed score of 75.