OPEN-SOURCE SCRIPT
Crypto Liquidation Zones & Order Clusters
This PineScript v6 indicator was specifically designed for crypto traders and displays estimated liquidation zones as well as probable order clusters on the chart. Since TradingView has no direct access to real order book data, stop-loss positions, or internal exchange liquidation levels, the indicator works with intelligent estimations based on historical volume data and market behavior.
The indicator identifies three main types of critical price zones: First, it marks psychological levels – round numbers like $100,000 or $50,000, where limit orders typically accumulate. Second, it highlights high-volume zones, areas with unusually high trading volume that indicate many traders have opened positions there. Third, the indicator calculates estimated liquidation zones for long and short positions by assuming typical leverage levels (default 10x) and projecting the probable liquidation prices.
The mechanism is based on analyzing volume spikes combined with volatility: When a strong price increase occurs with high volume, the indicator stores this level as a probable long-entry point and calculates the corresponding liquidation zone below the current price. During price declines with high volume, short positions are tracked and their liquidation zones are drawn above the price. Red zones mark long liquidations, green zones mark short liquidations, blue boxes show high-volume areas, and yellow dashed lines indicate psychological levels.
All settings are fully customizable: You can adjust the lookback period (default 100 bars), sensitivity for volume spikes, assumed average leverage, and toggle individual display elements. An info panel in the top-right corner shows you live how many long and short entry levels are currently being tracked and how current volume compares to the average. It's important to understand that all displayed zones are estimates – the indicator cannot see actual orders from other traders, but it provides valuable insights into areas where many positions are likely at risk and liquidation cascades could occur.
The indicator identifies three main types of critical price zones: First, it marks psychological levels – round numbers like $100,000 or $50,000, where limit orders typically accumulate. Second, it highlights high-volume zones, areas with unusually high trading volume that indicate many traders have opened positions there. Third, the indicator calculates estimated liquidation zones for long and short positions by assuming typical leverage levels (default 10x) and projecting the probable liquidation prices.
The mechanism is based on analyzing volume spikes combined with volatility: When a strong price increase occurs with high volume, the indicator stores this level as a probable long-entry point and calculates the corresponding liquidation zone below the current price. During price declines with high volume, short positions are tracked and their liquidation zones are drawn above the price. Red zones mark long liquidations, green zones mark short liquidations, blue boxes show high-volume areas, and yellow dashed lines indicate psychological levels.
All settings are fully customizable: You can adjust the lookback period (default 100 bars), sensitivity for volume spikes, assumed average leverage, and toggle individual display elements. An info panel in the top-right corner shows you live how many long and short entry levels are currently being tracked and how current volume compares to the average. It's important to understand that all displayed zones are estimates – the indicator cannot see actual orders from other traders, but it provides valuable insights into areas where many positions are likely at risk and liquidation cascades could occur.
Open-source script
In true TradingView 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 TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView 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 TradingView. Read more in the Terms of Use.