Liquidation volume is the total notional value of positions closed by forced liquidation over a period. A $500M day means half a billion dollars of positions were closed by risk engines, not that half a billion dollars left the market. The margin lost is much smaller, and the trading flow is the closing orders themselves.
01How it is measured
Each liquidation event carries the position size and price. Summing notional over a window gives the volume. That much is simple. The hard part is completeness: exchanges publish liquidation events with different completeness. Some push every order, others cap their public stream at a fixed number of events per second per symbol, and aggregator feeds add their own smoothing and thresholds.
Because of that, the same day measures differently on different sites. A tracker that quietly sums a thinned feed reports a floor, not the total. We record directly from exchange feeds wherever possible and mark which sources thin their streams, so a partial number is labeled partial.
02Reading it well
Volume alone says how big the flush was. The long or short split says which side was flushed, and together with open interest they say whether leverage was actually cleared. Our coin and exchange pages break the same measure down by asset and venue, and daily digests give the day-level view with the split.