How to use liquidation map?

Heatmaps, on the other hand, provide a visual representation of the trading activity across different price levels. These maps display the intensity of buying and selling pressure at various price points, allowing traders to quickly identify areas of high and low liquidity.

Liquidation Maps and Heatmaps are powerful tools in trading that act as price magnets. When liquidity is heavily concentrated at certain levels, the price of an asset tends to gravitate towards those specific areas. This is due to the high volume of transactions taking place at those price points, creating a magnetic pull that draws the price towards them.

Utilizing liquidation maps can help traders identify these key areas of liquidity concentration. By observing where the majority of trades are taking place, traders can gain insights into where the price is likely to move next. This can be extremely beneficial in making informed trading decisions.

Both liquidation maps and heatmaps can reveal key support and resistance levels. Support levels are areas where the price tends to find buying pressure and bounce back up, while resistance levels are areas where the price meets selling pressure and struggles to move higher.

By analyzing these maps, traders can identify these key levels and use them to their advantage. For instance, they may decide to enter a trade at a support level, anticipating a bounce back up, or they may choose to exit a trade at a resistance level, expecting the price to stall and potentially reverse.