OPEN-SOURCE SCRIPT
TraxisLab Liquidation Heatmap
The TraxisLab Liquidation Heatmap visualizes potential liquidation zones based on price structure, volume, and leverage dynamics. It is designed to provide a clear view of where liquidity is likely to accumulate directly within the chart.
What this indicator does
The indicator identifies price areas where leveraged long and short positions are most likely to be liquidated.
It uses pivot-based structure combined with volume and configurable leverage levels from 10x up to 100x to estimate and display these zones as a dynamic heatmap.
The goal is to highlight areas of concentrated liquidity, potential stop hunts, and zones where price is more likely to react.
Core functionality
Anchor data support allows the use of an external symbol, such as Binance perpetual futures, to improve the realism of the calculations.
Leverage-based calculations are applied across multiple tiers including 10x, 25x, 50x, and 100x.
Volume-weighted estimation assigns each zone an approximate liquidation size in millions of USD.
Cluster detection groups nearby zones together, indicating stronger areas of liquidity concentration.
Nearest zone identification highlights the most relevant zone relative to the current price.
Detailed tooltips provide additional context such as price level, long and short distribution, estimated size, and distance from the current market price.
Time-based fading reduces the visibility of older zones, keeping the focus on more recent data.
Visual structure
The indicator displays heatmap-style zones directly on the chart, with separate color schemes for long and short liquidations.
Intensity varies depending on leverage and clustering strength.
Optional cluster lines improve readability, while labels provide a concise overview of each zone.
An integrated table summarizes the most relevant nearby levels.
Calculation methodology
Liquidation zones are derived from market structure.
Pivot highs are used to estimate potential short liquidations.
Pivot lows are used to estimate potential long liquidations.
The calculations are based on the following formulas:
Short liquidation is calculated as price multiplied by one plus one divided by leverage.
Long liquidation is calculated as price multiplied by one minus one divided by leverage.
Additional factors include volume data, ATR for zone sizing and clustering, and a simulated position allocation model.
Important note
This indicator provides estimated liquidation zones and does not use actual exchange liquidation data.
The calculations are based on typical leverage behavior and market mechanics and are intended to approximate where liquidity is likely positioned.
Application
The indicator can be used to identify potential liquidity targets, anticipate volatility, and refine entries and exits around key levels.
It can also be combined with price action or other analytical methods for more advanced strategies.
This tool is intended for traders who focus on liquidity, structure, and market behavior.
Open-source script
In true PulseWire spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by PulseWire. Read more in the Terms of Use.
Open-source script
In true PulseWire spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by PulseWire. Read more in the Terms of Use.