Tools
Liquidity Heatmap
It shows the current market leveraged positions and the estimated liquidation levels when the market reaches a certain price level.
Liquidity Heat Map (Model-2)
What is Liquidity Heatmap?
A Liquidity Heatmap is a graphical representation where data is visualized through color changes, used in order flow analysis. This map shows the density of buy and sell orders at different price levels during a specific time period.
Typically, a Liquidity Heatmap is presented as a two-dimensional grid. The vertical axis represents price levels, while the horizontal axis represents time intervals. The color scale indicates the activity in order flow:
- Hot colors (orange, red): Indicates high-density buy or sell orders.
- Cool colors (purple, blue): Shows lower order density.
This tool provides traders with an important visual guide for understanding market liquidity and order density at critical price levels.
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