Why I Built LHM: A Liquidation Heatmap Directly on the Trading Chart

LHM stands for Liquidation Heatmap. For me, a liquidation heatmap has long been one of the most useful ways to read the crypto futures market. A standard chart shows what price has already done. A liquidation map helps estimate where leveraged positions may be vulnerable and where forced closures could add fuel to a move.

Before building QV Terminal, I did what many traders do: I opened separate services such as CoinGlass, Alphractal and other analytics platforms. They have done important work and taught the market to look beyond candles toward the distribution of potential liquidations. CoinGlass provides several map models and time ranges. Alphractal combines liquidation levels with a broad derivatives and on-chain analytics suite. Hyblock lets traders adjust leverage assumptions, granularity and the colour scale.

The problem was not that these tools were useless. Quite the opposite: I kept returning to them because the underlying idea is powerful. The problem was the workflow.

The heatmap lived in one window and my trading chart in another. I would find a bright area of potential liquidations, switch back to the chart and mentally transfer it to another scale, timeframe and price grid. If I had already zoomed the chart, moved into history or marked levels, I had to repeat that translation. Analytics maps may provide ranges, settings and zoom controls, but zoom alone does not solve the central problem: the liquidation structure should remain part of the same chart on which I read context and build the trade.

At some point I realised I did not want another tab with another attractive image. I wanted the liquidation heatmap to live inside the working chart. That became the idea behind LHM, QV Terminal's own liquidation heatmap.

A liquidation heatmap is a model, not a list of other traders' positions

An honest boundary matters here. CoinGlass, Alphractal, Hyblock and QV Terminal do not see the exact liquidation prices of every exchange account. Exchanges generally keep that information private. Every market heatmap is therefore a calculated model of potential zones, not an X-ray of other traders' accounts.

It does not say: 'Exactly this amount will definitely be liquidated at this price.' It answers a different and more useful question: given the available market data and the assumed leverage structure, where is an elevated concentration of vulnerable positions more likely to have formed?

That is why a bright band is neither an entry signal nor a promise that price will be drawn to it. It is an area that deserves attention. Its value appears only in the context of open interest, funding, actual liquidations, price structure and order-book liquidity.

I started with the model, not the colour palette

For LHM, we collect and normalise our own server-side history of available exchange data. The server gives every terminal a consistent source base, so users viewing the same instrument, timeframe and settings work from the same calculated foundation. The terminal then builds and renders the map locally.

The model uses more than price. It incorporates changes in open interest, a distribution across several leverage profiles, an approximation of maintenance-margin mechanics, the direction of the price impulse and, when enabled, funding as an additional positioning-bias input. New open interest is distributed between potential long and short zones, after which the model estimates the prices at which positions with different leverage become most vulnerable.

I deliberately avoided turning LHM into a black box with a single 'make it brighter' control. Traders can adjust the strength filter, visual intensity, detail, leverage profile, history depth, funding bias and palette. These display settings do not rewrite the underlying market data. They adapt the same map to the task at hand: quickly identify major clusters or inspect local structure in greater depth.

The key decision: LHM uses the same coordinates as the trade

In QV Terminal, the liquidation heatmap is not separated into another histogram and does not sit beside the chart as an independent widget. It is drawn directly beneath the candles on the same time and price axes. That changes the way I read it.

I can immediately see where a heat zone sits relative to current price, a local extreme, an LVL level, actual LIQ prints and a possible entry. I do not have to remember a price on one page and find it on another. I can zoom into a segment, move back through history, return to the latest candle and continue the analysis without losing context.

LHM also preserves the projection of zones to the right of the latest candle. That matters to me because the map should not merely explain a move that has already happened. It should help describe the structure with which price may still interact.

Detail should appear as you zoom, not disappear

One of my main objections to the conventional heatmap format was not the absence of zoom buttons, but the weak relationship between zoom and the model's real detail. A broad liquidation heatmap is useful for the big picture, yet a specific setup requires narrower price rows without turning the screen into noise. LHM therefore separates the calculated model from its presentation. The source map keeps its price detail, while the renderer selects the appropriate representation for the current scale. At overview scale, neighbouring values form readable zones. With stronger zoom, LHM can reveal finer levels from the same model.

This happens locally. Panning or zooming the chart does not trigger a new server request or force the trader to wait for another image. The map is divided into small cacheable tiles, and the terminal renders only the visible area. This keeps the chart responsive and leaves room to increase detail further without setting an artificial quality ceiling for modern Macs.

Adaptive Detail provides three modes. Clean keeps the structure wider and calmer. Balanced adds controlled detail under strong zoom. Detailed exposes more microstructure. They are not three forecasts and not three degrees of 'accuracy'. They are three ways to view the same calculated foundation.

What a bright LHM zone means

I read LHM as a map of potential market vulnerability, not a map of price targets. A bright area above price may indicate a greater concentration of potentially vulnerable short positions. An area below price may represent vulnerable longs. If price approaches such a zone while open interest is rising, funding shows a pronounced skew and the order book confirms the move, the possibility of acceleration matters more to me than the brightness of the band itself.

Another outcome is equally possible. Price reaches a strong zone, aggression fails to continue, DepthX shows opposing liquidity, actual liquidations do not expand and the market rotates back. In that case, the zone reveals a failed continuation attempt rather than a magnet.

How I combine LHM with DOM

One of the combinations I use most in QV Terminal is the liquidation heatmap together with DOM, the current order-book depth displayed directly on the chart.

These tools describe different sides of the market. LHM estimates where leveraged positions may be vulnerable. DOM shows the visible limit orders resting in the book right now. The first map describes potential forced flow; the second shows available liquidity and the intentions that participants are currently expressing in the order book.

A raw DOM can be overloaded with small orders. They flicker constantly and make it difficult to identify prices where meaningful capital is present. I therefore enable volume filters, set a minimum order size and use Only Filtered when appropriate. Small noise disappears, leaving the larger bid and ask levels that deserve attention. I calibrate the threshold to the instrument and current market liquidity: one fixed value cannot work equally well for BTC and a less liquid asset.

In practice, I often see a bright liquidation-map zone close to a concentration of large limit orders in the filtered DOM. The overlap makes sense. The model points to a concentration of potentially vulnerable positions, while the order book shows meaningful capital interested in the same price area. It does not prove that price must reach or pass the level, but it makes the area materially more important to monitor.

I then watch the order's behaviour, not merely its displayed size. If a level remains as price approaches, replenishes after being hit and the actual liquidation flow begins to expand nearby, that is one context. If the large order disappears before contact, moves farther away or cannot absorb aggression, that is a different context. Limit orders can be cancelled, so a large DOM value alone is never a guaranteed support or resistance level.

Three scenarios are especially interesting:

• A bright LHM zone and a large ask above price: I watch whether the area becomes resistance or whether removing the ask opens the path to accelerating short liquidations.
• A bright LHM zone and a large bid below price: I assess whether the bid can absorb selling or whether its consumption triggers further long closures.
• A bright zone without confirmation from large orders: I treat it more cautiously and look for confirmation in OI, LIQ, DepthX and price response.

This is where the advantage of a unified chart becomes especially clear. I do not have to reconcile the liquidation heatmap and the order book from memory. LHM, filtered DOM, candles and actual liquidations share one price scale. Instead of isolated indicators, I see the interaction among calculated vulnerability, visible capital and actual price movement.

I therefore use LHM with the other QV Terminal layers:

• OI shows whether new risk is entering the move or positions are being closed.
• Funding helps assess the cost and directional skew of holding positions.
• LIQ shows actual liquidations that have already happened, rather than calculated ones.
• Filtered DOM shows where large visible orders are resting.
• DepthX shows pressure, persistence and the reaction of order-book liquidity.
• LVL and price structure provide the context surrounding the heat zone.

No single map should make the decision for the trader. Its job is to reveal what ordinary candles do not show well and to place that information at the right point in the workflow.

Why I did not want to copy CoinGlass

CoinGlass, Alphractal and Hyblock solve their own problems and remain useful analytics products. My goal was never to prove that their maps are 'wrong'. I wanted to remove a specific friction I experienced myself: the separation between analysing potential liquidations and the chart on which the trading decision is made.

LHM therefore differs by more than its palette or number of settings. It is part of QV Terminal's unified trading canvas. The map uses our calculation architecture, adapts to timeframe and scale, remains on the price chart beside the other market layers and does not force the trader to assemble one decision from fragments scattered across multiple tabs.

To me, that is the right direction for an analytical tool: not adding more disconnected windows, but reducing the distance between data, understanding and action.

LHM continues to evolve

I do not consider the map finished. Its architecture was designed so we can increase detail, improve the position-distribution model, expand the server-side history and add new ways to validate liquidation zones without degrading the chart or allowing support for older hardware to define the product's limits.

The central idea, however, will not change: potential liquidations should be visible where the trader reads the market and builds the trade. Not in another tab. Not in a separate histogram. Directly on the chart. That is why I created LHM in QV Terminal.