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Learn to read a perpetual-futures liquidation heatmap: where leveraged positions may be vulnerable, and what the chart can actually tell you.
Daniel’s framework / The liquidity canvas
Picture the chart as a canvas, with pools of liquidity scattered across it like drops of paint. In Daniel’s analogy, market makers are the artists and price traces the brushstroke between those pools. Candles show the marks already made; the focus is on the significant pools still ahead.
A larger drop suggests more paint for a longer stroke. That is the intuition behind watching larger pools as potential destinations for an extended move. It is a way to frame a trade idea, not a formula linking pool size to distance or proof that market makers control the route.
Identify the larger pools above and below price. Consider their relative size and location before getting absorbed in individual candles.
Daniel’s approach is to plan a limit entry at the chosen liquidity shelf, with risk and invalidation defined before placing the order.
Use the next significant pool as a possible destination. Plan for the idea to fail too: price can turn early, move through a pool, or take another path.
The heatmap below applies this lens to estimated liquidation clusters. These are one part of the broader liquidity picture, not a complete map of orders or market-maker intentions.
Each horizontal band represents a price zone with estimated liquidation exposure. The horizontal axis is time; the vertical axis is price. Compare intensity within the same model and timeframe. It is not a count of confirmed resting orders.
Identify the venue, pair, timeframe, and model. A single-exchange chart cannot describe the entire market.
Heatmap levels are modeled exposure. Actual liquidation prints record forced closes that have already happened.
Record the pool where you entered, the next pool you expected price to reach, your invalidation, and what actually happened. Review those notes alongside your net P&L.
Educational illustration, not a trade recommendation or live data feed. Methodology reference: CoinGlass liquidation heatmap documentation. A live chart requires a separate licensed data integration.
