Spongevader

Why Liquidate.fun Is A Better Liquidation Heatmap Everywhere you turn, there's a liquidation heatmap. Most are the same picture. One exchange's open interest, one model, one lookback period, and colored lines on a map. Liquidate.fun was built with an understanding of the flaws of existing tools. One of the largest flaws is ghost levels. If you pull up a 3-month BTC map on one of the leading heatmap services, as an example, you'll see a bright yellow line at $62,262 showing $339.91M in liquidations. That number has remained persistent since that yellow bar formed and, most dangerously, is in no way accurate. This implies that traders who longed BTC in the low $60Ks are still ALL in position. That none of those traders have taken profit on their positions, despite a $20K move in their favor. This is simply not the case, and there are countless instances of these "ghost levels" across most liquidation heatmaps. Alternatively, many liquidation heatmaps suffer from the opposite problem. If price crosses a liquidation cluster, even if only for a second, the map removes that cluster entirely. The problem is that these "dumb" maps don't know how much of the cluster actually triggered. Was it 1% or 100%? Various venues have slightly different mark prices. What shows as the elimination of a heatmap band on your standard liquidation heatmap may, in fact, be mostly untouched and still armed. Liquidate.fun fixes these two most common problems in it's model. Lastly, and I'm sure you can relate, I've seen countless KOLs and influencers showing heatmaps as if they are gospel. "If X level is reached, we are going to rip up/down to Y level." As if a cascade is predestined. But a liquidation cluster, even a large one, is not always a cascade. Forced buying/selling from liquidations, especially when concentrated at the same level, is volume. But what no other liquidation map tells you is whether or not there is enough resting liquidity to absorb that volume. We call it "cover". Bringing in live data from over 40 venues, Liquidate.fun recalculates every three seconds whether there is enough resting liquidity (limit orders) on the books to absorb a cluster. It then reports on the cluster card the degree to which that cluster is "covered". If a cluster is 1.5x covered, the chances of that cluster cascading are fairly small. Alternatively, if a cluster is only 0.5x covered, the chances of that cluster cascading are fairly large. And this is where this data becomes important. A liquidation heatmap should do more than show you where liquidations might occur. It should help you understand whether those liquidations are actually capable of moving the market. A bright yellow line representing hundreds of millions in liquidations means very little if the positions no longer exist. And even when they do exist, a massive liquidation cluster means very little if the order books can comfortably absorb the resulting volume. Liquidations don't create cascades simply because they happen. Cascades happen when forced buying or selling overwhelms the liquidity available to absorb it. Your old heatmap is simply a colorful picture. Your new one provides actual intelligence. liquidate.fun/ 🫡 From the depths — The White Whale 🐋