In short, it predicts price levels where large-scale liquidation events may occur.

A liquidation happens when a trader's position is closed due to price moves and margin is insufficient. Most exchanges set liquidation levels—the price at which a leveraged trade is force-closed when entered.

Traders who can estimate others' liquidation levels gain an edge similar to seeing high liquidity on the order book. Coinglass liquidation heatmaps try to predict where mass liquidations may occur to help find the best liquidity zones.

The heatmap calculates liquidation levels from market data and leverage amounts, then plots those levels on the price chart.

In short, it predicts price levels where large-scale liquidation events may occur.

The heatmap predicts where liquidation levels may open, not where they close—so actual liquidations are often lower. Treat size as relative vs. other levels. Filter by major exchanges, pairs, and historical liquidation data.

Liquidation heatmaps help identify high-liquidity zones, useful in several ways:

Magnet:Heavy concentration of potential liquidation levels in a range may pull price toward that zone. Some traders use these levels with other indicators to gauge likely direction.

S/R:High liquidation zones let large traders ("whales") execute quickly at favorable prices. After they enter or exit, price may reverse.
Liquidation levels can also pressure bid or ask sides of the book, causing natural reversals.

Liquidation heatmaps matter in crypto because they strongly affect positions. Using this data wisely can support better decisions and improve odds of success.