On March 11, 2025, it was not less than $ 955 million that was liquidated in 24 hours on the Exchanges. If the cryptocurrency market can sometimes scare its volatility, the liquidation of a position constitutes the bane of the investor. Discovery of an underestimated tool to analyze risk areas: the thermal liquidation card.
Reminders of the basic terms of cryptocurrencies trading
To fully understand the interest of the liquidation map (or Heatmap liquidations), let's come back to the various elements that are inherent in. The principle of liquidation occurs when taking the position by a trader, when he wishes to place a long or shorts, that is to say:
- Long position (long) : estimate that the price of an asset will increase after purchase;
- Short position (shorts) : estimate that the price of an asset will drop after purchase.
Once the decision is taken, a liquidation price is determined. If this price is reached, the trading position is forced to closure by the Exchange. This usually happens when the trader no longer has enough funds (margin) to maintain its open position.
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Liquidations are particularly common in leverage trading, where traders use funds borrowed to increase the size of their positions.
Example (note that the values used here are completely fake):
A trader thinks that the price of Bitcoin will increase. He therefore decides to position himself by placing a long with a purchase price at 83,500 dollars and an X2 lever effect to increase the size of his position. The liquidation price is set at $ 78,000.
Unfortunately for our trader, the price of the BTC falls violently in the hours that follow, reaching 77,600 dollars on a wick before starting up. The position ends automatically, She is liquidated.
But how could our trader have avoided this annoying experience?
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What is the thermal liquidation card?
This is a remarkable tool that you can find on the Quince site. It allows at a glance to see where the “clusters” of liquidations of shorts and long positions are placed.
Example of the BTC on Binance liquidation card over the last 12 hours
As we can see in this image, the price of the BTC evolves around 82,000 dollars and 2 liquidation clusters stand out, materialized by more marked lines in yellow, at 82,300 dollars above and $ 80,700 below.
We can interpret this data as follows:
- For shorts, many positions will be liquidated if the price exceeds $ 82,300;
- For long, many positions will be liquidated if the price drops below 80,700 dollars.
Now let's see how our trader could have used this data on the one hand to prevent the loss of his trade, But above all to take advantage of it to take the market for the market.
The secret of this card is as follows:
