How to read a Bitcoin liquidation map (without getting liquidated)
Summary
A Bitcoin liquidation map is a visual tool that indicates potential liquidation levels in the cryptocurrency market, helping traders navigate volatility. Liquidation occurs when exchanges close leveraged positions due to insufficient margin, with long liquidations happening during price drops and short liquidations during price increases. A single liquidation cascade can result in significant losses. The map features an X-axis for bid prices and a Y-axis for liquidation activity strength, with taller bars indicating higher potential impacts. Tools like CoinGlass provide real-time maps for traders. Effective use of these maps requires combining them with broader technical analysis to avoid costly misinterpretations.
