Recently, I realized that the liquidation map is a powerful tool to read where the price is about to move. Sharks, market makers, liquidation bots—all use it because it shows where there are many stop-losses, liquidations, and leverage waiting.

The simplest way to understand it: the price will move toward the area with the most money to be liquidated. The liquidation map shows you those "money-rich" points.

Regarding the colors on the liquidation map, purple or dark blue = low liquidity, few people care. Green is medium, yellow is strong liquidity. But what you should pay attention to is dark yellow or orange—that's where there's extremely high liquidity, and the price often gets pulled toward those areas. The brightest zone is always where the price likes to go.

The derivatives market follows a basic rule: the price DOES NOT move according to technical analysis—it's driven by MONEY. Money is located in areas with lots of liquidations. If there are many long orders below the current price, when the price drops, a bunch will be liquidated. If there are many shorts above, when the price rises, shorts will explode. Market makers always want to move toward the place "where the most liquidations can happen."

When reading the liquidation map, you need to identify where the brightest zone is. If it’s below the current price, the price is likely to be pushed down. If it’s above, the price is likely to be pulled up. The fact that the price is moving toward the brightest zone means it’s "gathering liquidity." Once the liquidity in this area is "consumed," the market may reverse strongly.

How to use it: First, determine the direction the price is about to move by looking at where the brightest zone is. Second, never long when there’s a large liquidity pool below because sharks will pull down to "eat" liquidity first. Third, never short when there’s a big pool above because the price often "bounces" up to liquidate shorts.

But remember: the liquidation map DOES NOT give entry points—it only shows the market’s upcoming direction. Entry points should be based on support/resistance and price action. Liquidity pools can shift as more people open new orders, so update every 15-30 minutes. And most importantly: NEVER go against the direction of large liquidity, as the probability of losing is nearly 90%.

In summary, the liquidation map is a very powerful weapon if you know how to use it. It helps you identify whether the price is being pulled up or down, where market makers will sweep stop-losses, avoid getting stopped out repeatedly, and most importantly, enter trades aligned with the flow of money. I’ve used this tool and found it extremely useful. If you haven’t tried it yet, start with Gate—where there are plenty of tools to analyze the market.