A liquidation heatmap is a chart that estimates where liquidation prices sit. Price runs along one axis, time along the other, and color intensity marks the estimated notional that would liquidate at each price level. The bright bands are where many traders opened at the same leverage.
01How estimates are built
Nobody knows every position. Heatmaps are inferred from open interest changes: when OI jumps at a price, the tool assumes new leveraged positions were opened, computes their assumed liquidation prices at standard leverage levels, and paints them. The result is a plausible map of leverage clusters, with real uncertainty about sizes, leverage choices and collateral changes since opening.
Because of that inference, heatmap readings differ between vendors for the same market. They are a forecast of where forced selling might sit, which is genuinely useful, and a probability picture rather than a record.
02Prediction versus record
A heatmap says where liquidations might happen. A recorded feed says where they did happen, at what size, on which exchange, at what time. On this site the two complement each other: the terminal and daily digests are the record, so when price crosses a bright band on a heatmap you follow, you can check what actually printed in the feed.