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Liquidations

Liquidations

- Red lines are 100x high leverage positions
- Yellow lines are 50x mid leverage positions
- Blue lines are 25x low leverage positions

Charts available to all on TradingView with @leviathancrypto Liquidation Levels. I just keep this as my main chart view with columns - its a gem.

Leverage Liquidation-Based Trading Strategy

Utilize liquidation levels to make calculated, high-probability trades based on leveraged trader positioning and the likelihood of market flushes.

Core Principles:

  • High Leverage (100x): Prices will almost always flush out high-leverage positions (99.99% of the time).
  • Mid Leverage (50x): There's a strong chance (78%) the price will target mid-leverage levels.
  • Low Leverage (25x): Less frequent (25%), but safer to bet against.

Key Concepts:

  • Top of Range = Short: When price approaches the top range number, it will likely flush long positions and reverse.
  • Bottom of Range = Long: When price hits the bottom range number, it will flush short positions, likely leading to a reversal upwards.
  • Correlations: Monitor BTC's movements closely since correlated assets will also follow the range.

Trading Strategy:

  • Identify the Asset: Choose the asset to trade from the chart (BTC, SOL, SUI, ETH, BNB, ZEUS).
  • Find the Top and Bottom of Range: Based on the liquidation heatmap, mark the top and bottom price range for each asset.

Long Setup:

  1. Patience: Wait for the price to approach the bottom range number where shorts are likely to be liquidated.
  2. Confirmation Trigger: Watch for red/yellow/blue lines becoming denser near the bottom (indicating a significant short buildup). This increases the likelihood of a price bounce after liquidation.
  3. Entry: Long once price is near the bottom range number, especially if it's near a red (100x) or yellow (50x) line.
  4. Stop-Loss: Place the stop just below the bottom range to protect against unexpected further declines.
  5. Profit Target: Target either the middle of the range or hold for a move to the top range number if the momentum looks strong.

Short Setup:

  1. Patience: Wait for the price to approach the top range number where longs are likely to be liquidated.
  2. Confirmation Trigger: Look for buildup of red/yellow/blue lines near the top, indicating a likely flush of over-leveraged long positions.
  3. Entry: Enter a short when the price reaches or nears the top of the range, especially if the red (100x) or yellow (50x) lines are close.
  4. Stop-Loss: Place the stop just above the top range to avoid getting caught in an unexpected breakout.
  5. Profit Target: Aim to exit near the middle of the range, or hold for a move back to the bottom of the range depending on strength.

Additional Tips:

  • Track Volatility: If price approaches a dense area of red/yellow/blue lines, anticipate volatility and be ready for a rapid flush or liquidation event.
  • Manage Risk: Since 100x positions are almost always flushed, prioritize trades near these red lines. These have the highest probability of reversals.
  • Market Correlations: Pay close attention to BTC as it influences other assets on the chart. If BTC flushes, expect correlated assets to follow.
  • Patience Pays: The safest and most reliable trades occur at the bottom or top of the range. Be willing to wait days or even weeks for the perfect entry.

Summary of Strategy:

  • Long the Bottom of the range where shorts get flushed.
  • Short the Top of the range where longs get flushed.
  • Red Lines are your highest confidence zones for liquidation and reversal.
  • Yellow Lines offer strong but less frequent opportunities.
  • Blue Lines are safer but require more patience.
Minimize FOMO, and let the market come to you. Your patience will lead to safer, more predictable profits. This method leverages others' risk-taking behavior to your advantage while minimizing your own exposure.